US NFIB Small Business Confidence Highest In Over 6 Years

(RTTNews) - Small business confidence in the U.S. improved in December to its highest level in more than six years as the uncertainty over the economic outlook cleared following the presidential election in November, results of a survey by the National Federation of Independent Business showed on Tuesday.

The NFIB Small Business Optimism Index rose 3.4 points to reach 105.1 in December, which surpassed economists' expectations for a score of 100.5.

The reading came in above the 51-year average of 98 for a second straight month and was the strongest since October 2018.

Seven of the ten Optimism Index components increased, two decreased, and one was unchanged, the NFIB said.

The Uncertainty Index fell 12 points in December to 86.

"Optimism on Main Street continues to grow with the improved economic outlook following the election," NFIB Chief Economist Bill Dunkelberg said.

"Small business owners feel more certain and hopeful about the economic agenda of the new administration. Expectations for economic growth, lower inflation, and positive business conditions have increased in anticipation of pro-business policies and legislation in the new year."

The NFIB survey showed that the net 52 percent of owners expect the economy to improve, up 16 points from November and the highest since the fourth quarter of 1983.

The share of small business owners reporting inflation as their top concern in December was twenty percent, unchanged from November. Inflation led labor quality as the top issue by one point.

The net percent of owners raising average selling prices was steady at net 24 percent and those reporting labor costs as the single most important problem was unchanged at 11 percent, just two points below the higher reading of 13 percent logged in December 2021.

A seasonally adjusted 35 percent of all small business owners reported inability to fill job openings in December, down one point from November. The survey also revealed that 55 percent of owners hired or tried to hire in December and 89 percent of them reported few or no qualified applicants for the positions they were trying to fill.

Twenty percent of small business owners felt it was a good time to expand their business. This was highest reading since February 2020. The share of those expecting higher sales volumes also grew to its highest level since early 2020.

Meanwhile, the share of those planning to raise compensation fell to the lowest since March 2021.