U.S. Small-Business Confidence Soars

WASHINGTON (Reuters) – U.S. small-business confidence surged to its highest level in just over six years in December, extending post-election gains.

The National Federation of Independent Business (NFIB) announced that its Small Business Optimism Index increased by 3.4 points to 105.1 last month, the highest reading since October 2018.

This marks the second consecutive month that the index surpassed the 51-year average of 98. Additionally, the survey’s Uncertainty Index dropped 12 points to 86. The Nov. 5 U.S. election resulted in Republicans gaining control of the White House and Congress, a shift that typically boosts small business sentiment as owners tend to lean Republican.

While sentiment improved following the election, consumer caution is rising due to concerns about potential broad tariffs on imports and mass deportations of undocumented immigrants promised by President-elect Donald Trump’s administration, which could lead to higher household prices.

The University of Michigan’s survey indicated that both one-year and long-run inflation expectations shot up in January, while its consumer sentiment index declined.

In December, the percentage of small business owners anticipating economic improvement rose by 16 points to 52%, marking the highest level since Q4 1983. Moreover, the share of owners considering it a good time to expand their operations reached its peak since February 2020. More small business owners also expected growth in inflation-adjusted sales.