US small business sentiment has reached its highest level in nearly three and a half years, according to the National Federation of Independent Business (NFIB). In November, the NFIB’s Small Business Optimism Index jumped 8.0 points to 101.7, surpassing its previous high in June 2021.
The surge in confidence is largely attributed to post-election euphoria, with many small business owners leaning towards the Republican Party and expecting economic growth. The share of small business owners expecting an improvement in the economy has increased by 41 points to 36%, a level not seen since June 2020.
Businesses are also expected to expand operations, with more than 28% planning to increase prices, up 2 points from October. However, labor remains scarce, particularly in transportation, construction, and professional services industries. The share of businesses planning to hire more workers has increased by 3 points to 18%, the highest level in a year.
Regarding compensation, about 32% of owners reported raising wages, while 28% planned price hikes, with some explaining that wage hikes are necessary to maintain current employment and fill vacancies.
Source: https://www.reuters.com/markets/us/us-small-business-sentiment-nears-3-12-year-high-november-2024-12-10