Small Business Optimism Hits Six-Year High Ahead of Trump Administration

WARRENTON, Va. — Small business optimism in the U.S. has surged to its highest level in six years, driven by anticipation of a second Trump administration and its pro-business policies, according to the National Federation of Independent Business (NFIB).

The NFIB’s Small Business Optimism Index rose 3.4 points to 105.1 in December, marking the highest reading since October 2018 and surpassing the 50-year average. The increase follows a 2.5-year streak of declining optimism that ended in November, coinciding with 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 NFIB’s Uncertainty Index, which measures business owners’ confidence in the economic future, plunged 12 points to 86 in December. Dunkelberg attributed the shift to expectations of economic growth, lower inflation, and favorable business conditions under the incoming administration.

The survey revealed that 52% of small business owners expect the economy to improve, a 16-point increase from November and the highest level since the fourth quarter of 1983. Additionally, 20% of owners believe it is a good time to expand their businesses, the highest reading since February 2020.

Despite the optimism, inflation remains a significant challenge, with 20% of respondents citing it as their top concern. Labor shortages also persist, with 19% of owners identifying finding quality workers as their biggest problem.

Former President Donald Trump has pledged to reduce regulations and make his signature tax cuts permanent, policies that resonate with small business owners. During his first term, Trump’s deregulation efforts and tax reforms were credited with boosting economic growth and lowering unemployment.

The NFIB survey highlights a stark contrast between the optimism of small business owners and the economic challenges of the past four years, including high inflation and regulatory burdens. As the new administration prepares to take office, Main Street appears poised for a potential economic revival.