U.S. small business confidence rose in December to the highest level in just over six years, extending post-election gains.
The National Federation of Independent Business said this week that its small business optimism index rose 3.4 points to 105.1 last month, the highest reading since October 2018.
It was the second straight month that the index surpassed the 51-year average of 98. The survey’s uncertainty index fell 12 points to 86. The Nov. 5 U.S. election gave Republicans control of the White House and the United States Congress. Small business owners tend to lean Republican.
Although other sentiment surveys also improved after the election, caution is taking over among consumers amid concerns that the sweeping import tariffs and mass deportations of undocumented immigrants promised by the incoming administration of President-elect Donald Trump could raise prices for households.
The University of Michigan survey last Friday showed that both one-year and long-term inflation expectations spiked in January, and its consumer confidence index fell.
The share of small business owners who expect the economy to improve rose 16 points to 52 percent in December, the highest level since the fourth quarter of 1983. The share who said now is a good time to expand their business was the highest since February 2020. More small business owners expected growth in inflation-adjusted sales.