SMBC Chief Economist Joe Lavorgna reacts to the December jobs report and the potential economic effects of the incoming Trump administration on “The Big Money Show.”
U.S. small business owners feel better about the economy than they have in six years, anticipating President-elect Trump return to the White House.
The latest Small Business Optimism Index from the National Federation of Independent Business (NFIB) 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 oppose Amazon’s 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 in the same month as Trump’s victory.
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 as the economic outlook improves following the election,” said Bill Dunkelberg, NFIB chief economist. “Small business owners feel safer and more optimistic about the new administration’s economic agenda.”
A panel of small business owners discuss their prospects for a second Trump administration during an appearance on “The Big Money Show.”
Dunkelberg added: “Expectations for economic growth, falling inflation and positive business conditions have increased in anticipation of business-friendly policies and legislation in the new year. »
The investigation comes as the outgoing Biden-Harris administration continues to tout his economic policies, highlighting growth and low unemployment. But the high inflation and heavy regulations of the past four years have taken their toll on Main Street.
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Trump has pledged to cut regulations, as he did in his first term, and to make permanent the tax cuts he signed into law upon his return to the Oval Office.
Former President Donald Trump dances during his campaign rally at Crotona Park in the South Bronx on Thursday, May 23, 2024 in New York. (James Devaney/GC Images/Getty Images)
In the latest NFIB survey, the net percentage of homeowners expecting the economy to improve increased 16 points from November to 52% seasonally adjusted, the highest since the fourth quarter of 1983.
The percentage of small business Owners believing it is a good time to expand their business also increased, increasing six points to 20% seasonally adjusted, the highest figure since February 2020.
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The net percentage of owners expecting higher actual sales volumes increased eight points to a net rate of 22%, the highest figure since January 2020.
According to the December survey, inflation remained small business owners’ biggest problem in operating their businesses, with 20% of respondents citing it as their biggest problem. But finding quality labor is not far behind, with 19% saying it is their biggest problem.
