The National Federation of Independent Business (NFIB) released its February Jobs Report, indicating that the Small Business Employment Index increased by nearly one point to 103.5. This figure is 2.3 points higher than the 2025 average and 3.5 points above the historical average.
According to the report, 33% of small business owners had job openings they could not fill in February, a rise of two percentage points from January. The proportion of unfilled positions remains significantly above the historical average of 24%. Twenty-eight percent reported openings for skilled workers, up three points from the previous month, while openings for unskilled labor remained unchanged at 10%.
“February’s numbers show a growing tightness in the small business labor market,” said Chief Economist Bill Dunkelberg. “While the overall market remains in balance, employers need more skilled workers to fill open positions.”
Logan Shine, NFIB Iowa State Director, commented on how these trends are affecting local businesses: “Iowa’s small businesses are right in the thick of the national trend where 33% of owners have job openings they simply cannot fill. Our small business owners are resilient, but when 85% of those trying to hire report few or no qualified applicants, it limits the ability of our local shops and manufacturers to expand.”
The report also notes that a seasonally adjusted net 12% of owners plan to create new jobs over the next three months. This is down four points from January and marks the lowest level since May 2025; however, hiring plans remain close to their long-term average.
In February, more than half (54%) of small business owners reported hiring or attempting to hire—an increase from January. Of those hiring or trying to hire, 85% indicated they found few or no qualified applicants for open positions.
Fifteen percent of small business owners identified labor quality as their most significant challenge in February—a slight decrease from January and part of a four-month downward trend. Labor costs remained steady as a primary concern for nine percent of respondents.
A net 34% of small business owners raised compensation in February—the highest rate since March 2025—and a net 22% plan to raise compensation within three months.
For further details on these findings and additional statistics, readers can view the full NFIB Jobs Report by clicking here.
