US small business optimism hits six-year high

(Sharecast News) - Sentiment among small businesses in the United States rose to its highest in more than six years as optimism surrounding the economic outlook continued to improve following the presidential elections. The monthly Small Business Optimism Index from the National Federation of Independent Businesses (NFIB) rose to 105.1, up from 101.7 in November and well ahead of the 100.8 reading expected by analysts.

This was the second straight month of a print above the historic average level of 98 and its highest reading since October 2018.

A net 52% of small business owners said they expect the economy to improve, up 16 points from November and the highest proportion since 1983.

The net balance of owners saying it was a good time to expand their business improved markedly, along with those who predict sales volumes to increase.

"Small business owners feel more certain and hopeful about the economic agenda of the new administration," said the NFIB's chief economist Bill Dunkelberg.

"Expectations for economic growth, lower inflation, and positive business conditions have increased in anticipation of pro-business policies and legislation in the new year."

On the downside, a net 29% reported raising compensation during the month, down 3 points from November and the lowest reading since March 2021.