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SMBC chief economist Joe Lavorgna reacts to the December jobs report and the potential economic effects of the next Trump administration on The Big Money Show.
America's small business owners are feeling better about the economy than they have in six years, in anticipation of President-elect Trump returning to the White House.
The National Federation of Independent Business' (NFIB) latest Small Business Optimism Index jumped 3.4 points to 105.1 in December, the highest reading since October 2018.
WARRENTON, VA – FEBRUARY 10: Main Street on February 10, 2023 in Warrenton, Virginia. Several groups are opposed to Amazons plan to build a data center in the area. (Photo by Bonnie Jo Mount/The Washington Post via Getty Images)
This is the second consecutive reading above the 50-year average, after the November index broke a 2.5-year streak that same month as Trump's win.
At the same time, the NFIB's Uncertainty Index plunged 12 points last month, falling to 86.
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"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." close video Small business owners express optimism for Trumps second term
A panel of small business owners discuss their outlooks for a second Trump administration during an appearance on The Big Money Show.
Dunkelberg added, "Expectations for economic growth, lower inflation, and positive business conditions have increased in anticipation of pro-business policies and legislation in the new year."
The survey comes as the outgoing Biden-Harris administration continues to tout its economic policies, pointing to growth and low unemployment numbers. But the high inflation and heavy regulations of the past four years were felt on Main Street.
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Trump has vowed to slash regulations, as he did during his first term, and to make his signature tax cuts permanent when he returns to the Oval Office.
Former President Donald Trump dances at his campaign rally at Crotona Park in the South Bronx on Thursday, May 23, 2024 in New York City. (James Devaney/GC Images / Getty Images)
In the NFIB's latest survey, the net percent of owners expecting the economy to improve rose 16 points from November to a seasonally adjusted 52%, the highest since the fourth quarter of 1983.
The percent of small business owners believing it is a good time to expand their business also climbed, rising six points to a seasonally-adjusted 20%, which is the highest reading since February 2020.
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The net percent of owners expecting higher real sales volumes rose eight points to a net 22%, which is the highest reading since January 2020.
Inflation remained small business owners' single most important problem in operating their business according to the December survey, with 20% of respondents listing it as their biggest headache. But finding quality labor was not far behind, with 19% saying that was their greatest problem.