The NFIB Small Business Optimism Index, a key measure of the health of small businesses in the United States, has seen a significant rise. The index increased by eight points in November to 101.7, marking its highest level since June 2021. This marks an end to a period of 34 months where it remained below the long-term average of 98.
Bill Dunkelberg, NFIB Chief Economist, noted that recent election results have brought about "a major shift in economic policy," which has resulted in increased optimism among small business owners. He mentioned that Main Street is now more certain about future business conditions and hopeful for policies favoring economic growth and relief from inflationary pressures.
Key findings from the report include a substantial increase in the net percentage of owners expecting the economy to improve, which rose by 41 points from October to reach a net 36%. This figure represents the highest level since June 2020. Furthermore, there was an eight-point increase in those who believe it is a good time to expand their business, reaching a net 14%, also the highest since June 2021. Additionally, expectations for higher real sales volumes climbed by 18 points to a net 14%, marking the best reading since February 2020.
The NFIB's Small Business Optimism Index serves as an important tool for policymakers including the Federal Reserve and Congressional leaders. It reflects insights from NFIB-member small-business owners across America without state-level breakdowns.
For over eight decades, NFIB has advocated for small and independent business owners across Washington D.C., and all state capitals. More information can be found on their website nfib.com.
