Business confidence climbed slightly higher in June but remains in pessimistic territory, according to the Associated Industries of Massachusetts, news that comes even as the Bureau of Labor Statistics reported greater-than-expected job growth and lower unemployment for last month.

According to AIM’s June Business Confidence Index, employers are feeling somewhat better about the state of the economy than they did in May but are still unsure how to feel about the Trump Administration’s tariff policies.

“Business confidence edged up in June, but employers remain pessimistic overall amid concern over tariffs, tax policy and conflict in the Middle East,” AIM wrote of its findings.

June’s BCI came in at 48.9 points, up 1.1 points from the month prior. A reading of less than 50 on AIM’s 100-point scale indicates a pessimistic outlook, according to the association. Businesses have felt pessimistic since at least March. Confidence fell to a post-pandemic low in April, landing at 41.5 points.

The slight upward swing seen last month is reflective of strong jobs numbers, the recovery of the U.S. stock market from a sudden drop seen alongside the Trump Administration’s early April “Liberation Day” tariff announcement, and because the rate of inflation stayed within “moderate” territory, according to AIM.

Sara Johnson, the chair of AIM’s Board of Economic Advisors, said that it appears businesses feel much better about their own financial footing than they do about the government’s economic outlook.

“The June Business Confidence Index reveals that employer attitudes about the private sector – the prospects for their own companies, employment and the manufacturing sector – are far stronger than views of the state and national economies,” Johnson said.

Simultaneous budget debates on Beacon Hill in Boston and Capitol Hill in Washington D.C. only served to underscore employers’ uncertainty about the government’s change in policies and their future impacts, according to AIM President and CEO Brooke Thomson.

“All of this is a big concern for Massachusetts employers, who depend upon the government to manage its affairs prudently and minimize the tax burden on companies as they seek to grow and create jobs. The combination of budget uncertainty, shifting policy on tariffs and economic contraction in the commonwealth during the first quarter of 2025 is front-of-mind for employers,” Thomson said.

The BCI comes following a surprising June jobs report, which came in about 29,000 jobs higher than was originally forecast at 147,000 jobs added. At the same time the unemployment rate fell to 4.1% from 4.2%.

However, that report also showed that private employers only account for 74,000 of those jobs, with the rest of hires coming from state and local governments. That’s about half the public-sector job growth seen in May. According to AIM, hiring bosses are conducting business with tariffs in the back of their minds. The deadline set by the Trump Administration for U.S. trading partners to secure a “deal” on tariffs is Wednesday, and businesses are taking a “wait and see” approach.

“Participant comments suggest that employers remain concerned about tariffs and the ability of the Trump Administration to conclude individual agreements with key trading partners,” Johnson said.

AIM surveys more than 140 Bay State businesses to build their Business Confidence Index, the first of which was published in July of 1991. According to the association, business confidence reached historic highs in 1997 and 1998, with two months in either year showing 68.5% confidence, and fell to its lowest in February of 2009, when it was 33.3%.