Small business optimism declined for the fourth straight month in April, with the lowest level of Main Street firms planning investments to expand business since 2020.

Why it matters: The findings predate the trade war deescalation with China, but the ongoing sentiment slump is the freshest warning about the economic risks associated with sky-high tariffs and broader uncertainty.

What they're saying: "Very few small businesses export their goods and services, but millions acquire imported goods as inputs to their operations and those supply chains are currently at risk," said economists with the National Federation of Independent Business, the small business lobbying group that conducts the monthly survey.

• "Tariff policy is suddenly and dramatically changing relative prices (costs), and relative prices drive all decisions," they said in a statement.

By the numbers: The NFIB small business optimism index fell by almost 2 points last month to the lowest since October.

• The overall index, however, masks some of the significant deterioration in underlying expectations among small business owners. About 18% of firms plan capital expenditures — spending on new equipment or buildings for instance — in the next six months, the smallest share since April 2020.
• Fewer owners anticipated better business conditions down the line, with the smallest share of small firms reporting as much since October.
• The NFIB reported a "historically low" number of owners who say now is a good time to expand their business. Those who say it is not a good time to expand business overwhelmingly cite "economic conditions" as the reason.

The intrigue: Optimism among small businesses shot up after the election, though those gains have vanished.

• The recent April survey results capture the "Liberation Day" tariffs announcement and subsequent pause on all countries except China.
• The Treasury Department reported a record-breaking $16 billion collected in tariff revenue last month, up from the $8.7 billion collected in March.

Between the lines: Main Street's reported concerns are largely based on downbeat expectations about the future, a sign that the temporary deal to significantly reduce tariffs on Chinese goods would be welcomed by small businesses.

• There were bright spots in survey questions rooted in the current state of their business. Many owners were still looking to hire workers last month.
• The net share of owners reporting higher nominal sales in the last quarter rose, though the NFIB cautions the number of businesses reporting higher sales remains in "recession territory."

To understand the degree to which President Trump's deescalation on tariffs has buoyed the U.S. economic outlook, the best place to look is probably the foreign exchange market.

Why it matters: The decline in the dollar, in the wake of last month's tariff announcement, represented the consensus in the market that the new levies would tip the U.S. into a recession.

• As the Trump administration has struck deals on the tariff front, the dollar has regained much of its losses.

By the numbers: The ICE U.S. dollar index closed on April 2 at 103.8, and it then fell to a low of 98.2 on April 21, a significant decline of 5.4%.

• Since then, it has recovered most of those losses and now stands at 101.8, just 1.9% below its level on "Liberation Day."

Between the lines: The fact the dollar has weakened rather than strengthened, as normally happens upon the introduction of tariffs, still means the market is bearish on the U.S. economy.

• They're just not quite as bearish as they were three weeks ago.
• The perceived probability of a U.S. recession this year, as traded on Polymarket, has now receded to 42%, down from a high of 66%.

Follow the money: For U.S. investors, the low point of the period following "Liberation Day" came on the morning of April 7, when stocks traded 12.6% below where they had closed on April 2, before the tariff announcement.

• For European investors, however, the pain was worse. For them, the April 7 low was "only" 13.1% below April 2. Then there was another, deeper, low on April 21, when stocks fell 15.2% from their levels before "Liberation Day."
• Since then, the S&P 500 has gained an eye-popping 18.6%, in euro terms, in three weeks and is now higher than it was on the day of the announcement.

The bottom line: The currency market, just like the stock market, seems to believe Trump's various tariff pauses are going to stay in place indefinitely.

The share of international job seekers looking to work in the U.S. has declined sharply this year, per a report from Indeed out today.

Why it matters: The labor market is slowing down, and stricter immigration policy — beginning with the Biden administration and accelerating under President Trump — is further cooling demand for American jobs.

By the numbers: Clicks from job seekers outside the U.S. started climbing in 2021 as the job market boomed amid the pandemic recovery. They peaked in August 2023, at 2.4% of all postings, and declined to 1.7% by March 2025.

The big picture: Certain industries, like health care and construction, rely heavily on workers from outside the country.

• The share of workers born outside the U.S. has been rising for years, as more native-born Americans are aging out of the workforce than entering it.

The intrigue: Immigrants make up 40% of home health aides and 26% of physicians and surgeons, according to data cited by the Niskanen Center. These jobs will still be in demand regardless of an economic downturn.

• Employers are concerned about the possibility of more staffing challenges as immigration restrictions tighten in the Trump administration.

How it works: The job site Indeed tracks the clicks on U.S. jobs from those with IP addresses outside the country.

• It also examines the clicks on jobs in Australia, Canada and Germany from outside those countries, and each saw declines in interest as well, lining up with similar tighter immigration policies and cooling labor markets there.

Between the lines: It's still not clear from the Indeed data if the job market is possibly following a pattern seen in the tourism industry, where folks are less eager to come to the U.S. because of a rise in hostility to foreigners.

The bottom line: There's less incentive for people from other countries to look for jobs abroad, since there are now fewer positions and stricter immigration policies.