Small business optimism surges after the election
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The National Federation of Independent Business (NFIB) Index of Small Business Optimism jumped by 7.4 points to 105.8, the highest level since 2004.
The prior month saw the index rise by 3.5 points, while October saw an uptick of 0.8.
The bulk of the increase came from a huge shift in firms' expectations for sales and the economy going forward. In fact, a net 50% of firms said in December that they expect the economy to improve, up from 12% in November and -7% in October.
The huge surge in optimism follows the US presidential election. Several analysts argued that the post-election enthusiasm at least partially contributed to the jump.
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However, this optimism has yet to translate into significant spending. "...planned capex has shown little move yet. Job openings slipped slightly. The share of firms raising prices or worker comp was little changed - although plans to hike prices and wages turned up. The workers per firm measure was unchanged in Dec - extending its recent zero net hiring trend," added Coffin.
"Small business sentiment has become great again," Renaissance Macro's Neil Dutta wrote in an email after the report. "But here is an interesting nugget, this index ran higher in the early to mid-2000s than it did in the late 1990s. What era does the average American think more fondly of with respect to their own personal finances?"
In any case, the bottom line is that small business owners in America are suddenly feeling much more optimistic about the economic outlook.
"We haven't seen numbers like this in a long time," NFIB President and CEO Juanita Duggan said.
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