REPORT: Small Business Optimism Surges Post Election

The NFIB Small Business Optimism Index rose to its highest reading since June 2021 surging by eight points in November to 101.7 after 34 months of remaining below the 50-year average of 98. A net percent of small business owners expect the economy to improve under the incoming Trump administration. The surge in optimism breaks a near three year streak of record-high uncertainty.

Key findings include:

• The net percent of owners expecting the economy to improve rose 41 points from October to a net 36 percent, the highest since June 2020. This component had the greatest impact on the overall increase in the Optimism Index.
• The net percent of small business owners believing it is a good time to expand their business rose eight points to a net 14 percent. This is the highest reading since June 2021.
• The net percent of owners expecting higher real sales volumes rose 18 points to a net 14 percent (seasonally adjusted), the highest reading since February 2020.
• A net 5 percent of owners reported paying a higher rate on their most recent loan, unchanged from October’s lowest reading since January 2022.
• Twenty-eight percent (seasonally adjusted) plan capital outlays in the next six months, up six points from October. This is the highest reading since January 2022.
• The frequency of reports of positive profit trends was a net negative 26 percent (seasonally adjusted), up seven points from October and the highest reading of this year.
• Twenty percent of owners reported that inflation was their single most important problem in operating their business (higher input and labor costs), down three points from October and surpassing labor quality as the top issue by one point.
• Thirty-six percent (seasonally adjusted) of all owners reported job openings they could not fill in the current period, up one point from October.

“Small business job creators are obviously thrilled to put the election silliness behind them and are optimistic that the new leadership in Washington, DC will put their priorities above politics,” said Tray Abney, state director for NFIB in Nevada. “We can only hope that our leaders in Carson City will do the same next year.”

“The election results signal a major shift in economic policy, leading to a surge in optimism among small business owners. Main Street also became more certain about future business conditions following the election, breaking a nearly three-year streak of record high uncertainty. Owners are particularly hopeful for tax and regulation policies that favor strong economic growth as well as relief from inflationary pressures. In addition, small business owners are eager to expand their operations, said NFIB Chief Economist Bill Dunkelberg.

The monthly report is considered the gold standard measurement of the country’s small business economy and used by the Federal Reserve, congressional leaders, administration officials and state legislatures. The typical NFIB member employs between one and nine people and reports gross sales of about $500,000 a year.