Unprecedented Surge in Small Business Optimism as Election Uncertainty Clears
The National Federation of Independent Business (NFIB) Small Business Optimism Index witnessed a significant surge to 105.1 in December 2024. This remarkable 3.4-point increase marks the highest reading since October 2018. The index has now stayed above the 51-year average of 98 for two consecutive months, primarily driven by the improved economic expectations in the wake of the election results.
“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 certain and hopeful about the economic agenda of the new administration.” The Uncertainty Index also reflected this positive sentiment, dropping significantly by 12 points to 86, indicating increased confidence in future business conditions.
Key improvements included:
- A 16-point rise in owners expecting economic improvement, reaching 52%, the highest since 1983
- Increased willingness among business owners to expand their businesses
However, challenges persist. Inflation remains the top concern for 20% of respondents, followed by labor quality issues. Despite the overall optimism, 35% of small business owners reported job openings they couldn’t fill, highlighting ongoing workforce challenges.
Source: NFIB