Principal Financial Well-Being Index Show Low U.S. Business Confidence

June 05, 2025 - A recent study from Principal show The Principal Financial Well-Being Index dropped to 6.02 in June 2025, down from 7.8 in November 2024—its lowest since November 2020. The small and midsized business (SMB) index saw a record 14% decline, falling from 7.38 to 5.69. Only 16% of employers believe the U.S. economy is growing, down 24 points from last June, though 56% still report business growth and 29% see local economic growth. Optimism has declined sharply, with only 36% of SMBs optimistic about the year ahead, compared to 59% in late 2024.

Economic inflation (55%), U.S. stability (55%), and recession fears (49%) are the top concerns. Despite this, 90% of employers are maintaining or growing staff, focusing instead on cost control and efficiency. Employers are also contending with rising healthcare (58%) and benefits costs (51%), while 95% report supply chain disruptions. Many are cutting non-essential spending to preserve staff and operations. According to Principal’s Amy Friedrich, policy clarity is key to restoring confidence amid the current uncertainty.