US small business sentiment falls to 11-month low in March

WASHINGTON, April 14 (Reuters) - U.S. small-business sentiment dropped to an 11-month low in March as a surge in oil prices ‌because of the war in Iran overshadowed the benefits from ‌low taxes, a survey showed.

The National Federation of Independent Business said on Tuesday its ​Small Business Optimism Index dropped 3.0 points to 95.8 last month, the lowest level since April 2025, and pushed it below its 52-year average of 98.0.

The survey's uncertainty index jumped 4 points to 92, well above its ‌historical average of 68. The ⁠survey followed on the heels of news last week from the University of Michigan's Surveys of Consumers that ⁠its Consumer Sentiment Index plunged to a record low in April.

A rebound in both small business and consumer sentiment is unlikely in the near ​term as ​oil prices shot up on Monday ​to more than $100 a barrel ‌after the U.S. military said it would blockade ships leaving Iran's ports. Crude prices have jumped more than 35% since the U.S.-Israeli war with Iran started at the end of February.

"The 20% Small Business Deduction and other supportive small business tax provisions in the Working Families ‌Tax Cut Act have had many positives ​for small business owners," said NFIB Chief ​Economist Bill Dunkelberg. "However, the ​dramatic spike in oil prices has spooked consumers and ‌owners alike. Small business owners are having ​to absorb those ​higher input costs and pass them along to their customers."

Businesses were pessimistic about profit and sales prospects. The share of owners ​expecting better business conditions ‌dropped 7 points to a seasonally adjusted 11%, the lowest ​since October 2024 and marking the third consecutive monthly decline.

(Reporting by ​Lucia Mutikani; Editing by Andrea Ricci)