U.S. small-business confidence reached its highest point in nearly 3-1/2 years in November, according to the National Federation of Independent Business (NFIB).
The NFIB’s Small Business Optimism Index increased by 8.0 points to 101.7, marking the highest level since June 2021.
This surge followed the recent elections, which saw Donald Trump winning the presidential race and the Republican Party gaining control of Congress.
Small business owners, who typically lean Republican, showed increased confidence, a trend anticipated by economists.
Other sentiment surveys also reported improvements in consumer confidence post-election.
Economic improvement
The percentage of small business owners expecting economic improvement rose significantly, indicating a shift in outlook.
More owners believe now is a good time to expand their business, with expectations for higher sales growth increasing. Concerns about inflation slightly lessened, as fewer owners cited it as their primary issue.
Additionally, the uncertainty index for small businesses dropped, reflecting increased stability in economic expectations.
Despite ongoing labor shortages in various sectors, the number of businesses planning to hire rose to the highest level in a year.
Compensation for employees saw an uptick; 32% of owners reported increases, while a notable percentage plans further raises in the coming months.
