US election results drive small business optimism to three-year high

(Sharecast News) - A survey measuring optimism among small businesses in the United States smashed expectations on Tuesday, jumping to its highest level in more than three years, as confidence among corporations surged in the aftermath of the presidential elections. The National Federation of Independent Business (NFIB) small business optimism index rose in November to 101.7, up from 93.7 in October and well ahead of the 94.2 level expected by analysts.

This was the first time in 34 months that the indicator has broken the 50-year average of 98, and marked the highest reading since June 2021.

Of the 10 components to the index, nine increased over the month and one was unchanged. In particular, the uncertainty sub-index dropped sharply, falling to 98 from October's record-high level of 110.

The net balance of small business owners expecting the economy to improve surged 41 points to +36%, the highest since June 2020, while those who think it is a good time to expand their business rose eight points to a net +14%, the highest since June 2021.

"The election results signal a major shift in economic policy, leading to a surge in optimism among small business owners," said NFIB chief economist Bill Dunkelberg.

"Main Street also became more certain about future business conditions following the election, breaking a nearly three-year streak of record high uncertainty. Owners are particularly hopeful for tax and regulation policies that favour strong economic growth as well as relief from inflationary pressures."