Small business owners tend to lean Republican and the sharp increase in confidence had been widely anticipated by economists
US small-business confidence surged to the highest level in nearly 3½ years in November amid post-election euphoria.
The National Federation of Independent Business (NFIB) said on Tuesday (Dec 10) its Small Business Optimism Index jumped 8.0 points to 101.7 last month, the highest level since June 2021. Donald Trump won the race for the White House and his Republican Party clinched control of the US Congress in last month’s elections.
Small business owners tend to lean Republican, and the sharp increase in confidence had been widely anticipated by economists. Other sentiment surveys, including the University of Michigan’s surveys of consumers, have also improved in the aftermath of the Nov 5 election, though along party lines.
The share of small business owners expecting the economy to improve soared 41 points to 36 per cent, the largest since June 2020.
The proportion saying now is a good time to expand their business rose to levels last seen nearly 3½ years ago. More businesses expected higher sales growth, and the ranks of those saying inflation was their top issue declined.
The survey’s uncertainty index dropped 12 points from a record high of 110 in October.
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Labor remains scarce at small businesses, especially in the transportation, construction and professional services industries. The share of businesses planning to hire more workers increased by 3 points to 18 per cent, the highest in a year.
About 32 per cent of owners reported raising compensation, up a point from October. The share planning to increase compensation over the next three months vaulted 5 points to 28 per cent, the highest reading this year.
About 28 per cent planned price hikes, up 2 points from October.
“Wage hikes are necessary to maintain current employment and hopefully to help fill vacancies,” said Bill Dunkelberg, chief economist at the NFIB. REUTERS
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