The National Federation of Independent Business's monthly Small Business Optimism Index rose to a reading of 99.8 in July from 97.4 in June but was below a reading of 100.3 a year earlier.
"Small business optimism rose again in July, with a significant increase in owners expecting to hire, accompanied by an improvement in plans to make capital expenditures," said NFIB Chief Economist Bill Dunkelberg. "Although uncertainty is currently elevated, Main Street anticipates that business conditions will continue to improve."
There were monthly increases in eight of the 10 component measures, compared with two decreases.
The measure of plans to increase employment rose by nine percentage points to a net 20% and was the largest positive contributor to the overall index.
A net positive reading indicates that more respondents expect an increase than those expecting a decrease, and vice versa for a net negative reading.
There were also gains in the readings for capital outlays plans (to a net 25%), inventories plans (to a net 1%), current job openings (to a net 36%), expansion plans (to a net 12%), the earnings trends (to a net minus 16%), economic expectations (to a net 15%) and credit conditions expectations (to a net minus 4%).
There were declines for sales expectations (to a net 7%) and current inventory levels (to a net minus 2%).