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SMBC Chief Economist Joe Lavorgna reacts to the December jobs report and the potential economic effects of the incoming Trump administration on ‘The Big Money Show.’
US small business owners feel better about the economy than they have in six years, forecast President-elect Trump returning to the White House.
The latest National Federation of Independent Business (NFIB) Small Business Optimism Index rose 3.4 points to 105.1 in December, the highest reading since October 2018.
WARRENTON, VA – FEBRUARY 10: Main Street on February 10, 2023 in Warrenton, Virginia. Several groups oppose Amazon’s plan to build a data center in the area. (Photo by Bonnie Jo Mount/The Washington Post via Getty Images)
This is the one second consecutive reading above the 50-year average, after the index snapped a 2.5-year hitting streak in November the same month as Trump’s victory.
At the same time, the NFIB Uncertainty Index fell 12 points last month to 86.
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“Optimism on Main Street continues to grow with the improved economic outlook following the election,” said NFIB Chief Economist Bill Dunkelberg. “Small business owners feel more confident and hopeful about the new administration’s economic agenda.”
A group of small business owners discuss their outlook for a second Trump administration during an appearance on “The Big Money Show.”
Dunkelberg added: “Expectations for economic growth, lower inflation and positive trading conditions have increased in anticipation of business-friendly policies and legislation in the new year.”
The survey comes as an outbound Biden-Harris Administration continues to promote its economic policies, pointing to growth and low unemployment figures. But the high inflation and heavy regulations of the last four years were felt on the High Street.
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Trump has pledged to cut regulations, as he did during his first term, and to make his tax cuts permanent when he returns to the Oval Office.
Former President Donald Trump dances at his campaign rally at Crotona Park in the South Bronx on Thursday, May 23, 2024, in New York City. (James Devaney/GC Images/Getty Images)
In the latest NFIB survey, the net percentage of homeowners who expected the economy to improve rose 16 points from November to a seasonally adjusted 52%, the highest since the fourth quarter of 1983.
The percentage of small business Owners who believed it was a good time to expand their business also rose, rising six points to a seasonally adjusted 20%, the highest reading since February 2020.
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The net percentage of owners expecting higher actual sales volumes rose eight points to a net 22%, the highest reading since January 2020.
According to the December survey, inflation remained the biggest issue for small business owners when it comes to running their business, with 20% of respondents ranking it as their biggest headache. But finding quality labor wasn’t far behind, with 19% saying it was their biggest problem.
