In November, small business optimism hit its highest level since the Reagan administration, according to the monthly National Federation of Independent Business (NFIB) Index of Small Business Optimism, released earlier this week (12.12.2017). “We haven’t seen this kind of optimism in 34 years, and we’ve seen it only once in the 44 years that NFIB has been conducting this research,” Juanita Duggan, president and CEO of NFIB, said. “Small business owners are exuberant about the economy, and they are ready to lead the U.S. economy in a period of robust growth.”
3.7 points | The Index gained 3.7 points in November, a sharp increase over what was already a near-record performance the previous month.
8 | Eight of 10 components of the index posted gains
16 | The component “Expected Better Business Conditions” jumped a near record 16 points
13 | The component “Sales Expectations” also jumped a near record 13 points
Second-best reading in index history
“This is the second-highest reading in the 44-year history of the Index,” said Bill Dunkelberg, NFIB’s chief economist. “The NFIB indicators clearly anticipate further upticks in economic growth, perhaps pushing up toward 4 percent GDP growth for the fourth quarter. This is a dramatically different picture than owners presented during the weak 2009–16 recovery. The change in the management team in Washington has dramatically improved expectations.”
Job Creation plans increased six points last month, providing more evidence of a strong labor market.
+4 points | It’s a good time to expand
+3 points | Inventory plans
+3 points | Inventory satisfaction
+2 points | Actual earnings trend
“Job creation faded, but hiring plans soared, primarily in construction, manufacturing, and professional services,” Dunkelberg said.
Finding qualified workers has been a persistent problem for small business owners all year, which is a reliable sign of a growing economy. In November, it was the second most-important problem facing small business owners. Only taxes polled higher.