US small business optimism eases in Q4, cash flow comfort softens

The holiday period has taken on added significance this year, particularly for retailers. As many as 91 per cent of retail businesses said the season is critical for profitability, while nearly four in five small businesses overall described the holidays as important for profits, up from 70 per cent last year, the US Chamber of Commerce said in its latest published report.

To capture consumer spending, more firms are planning promotions, extended opening hours and seasonal hiring, even as inflation forces many to raise prices.

Inflation continues to shape holiday strategies, with 58 per cent of small businesses expecting to increase prices and 52 per cent anticipating lower revenues during the season. At the same time, 29 per cent plan to hire seasonal workers, while a growing share intend to offer discounts and extend business hours. Charitable giving is also on the rise, with 65 per cent planning donations this holiday season, up from 54 per cent a year earlier.

Beyond seasonal considerations, inflation remains the most cited challenge overall, named by 45 per cent of small businesses. Workforce concerns are gaining momentum, with employee retention cited by 17 per cent of respondents and talent attraction by 14 per cent, more than double last year’s level. While 74 per cent of businesses remain comfortable with cash flow, the share saying they are very comfortable fell to 24 per cent from 31 per cent in Q3.

“Small businesses are showing resilience, even amid uncertainty exacerbated by the longest government shutdown in history, when this survey was in the field,” said Tom Sullivan, senior vice president of small business policy at the US Chamber of Commerce. “Inflation remains the top challenge, and workforce concerns are rising. At the same time, the holiday season is more important than ever for small businesses’ bottom lines.”

“This quarter’s Index makes it clear: attracting and retaining employees is a growing concern for today’s small businesses,” said Bradd Chignoli, executive vice president and head of regional business and workforce engagement at MetLife. “As small businesses consider their workforce goals and the employee experience offered, meaningful benefits aren’t just nice-to-haves—but a strategic imperative to support business outcomes.”

Concerns around hiring and retention have steadily intensified over the past year and now rank as the third most cited challenge after inflation and revenue. Manufacturing firms and businesses employing between 20 and 500 people reported the highest levels of workforce-related pressure, underscoring the structural challenges facing small enterprises as they head into 2026.

ALCHEMPro News Desk (SG)