Love or hate him, President Trump certainly can make America’s small business feel good about their future. For confirmation look no further than the latest report from the NFIB Small Business Optimism Index, according to which “small business confidence blasted off the day after the 2016 election and remained in the stratosphere for all of 2017,” making last year an all-time record setter for the NFIB Index of Small Business Optimism.
Having hit an all time high in November, the December NFIB Small Business Optimism Index fell 2.6 points to 104.9 in December, down from the 107.5 last month which the NFIB said was one of the highest in the series’ history. The drop suggested that the burst of confidence in November was more of a rebound after two months of lower readings in September and October related to uncertainties after three brutal hurricanes in late August and early September. Discounting the November index, the December reading is in line with the overall strong tone for 2017 as a whole, and reflected solid conditions.
Two of the December components posted gains, five declined, and three remained unchanged. Moving the Index moderately lower were declines in Expected Better Business Conditions (11-point decline) which tends to fluctuate sharply and Inventory Plans (8-point decline). Small business owners were bedeviled by a labor shortage in 2017 that grew more intense as optimism rose. The NFIB Jobs Report last week showed that problem reaching record levels.
Offsetting the dip in Expected Better Business Conditions was a dramatic,14-point improvement in Actual Sales for December. In November, a net negative five percent of all firms reported sales increases. A net nine percent reported higher sales in December, indicating a very strong holiday season for small business.
But the real story was not the modest slowdown in December optimism, but the monthly data in 2017: “2017 was the most remarkable year in the 45-year history of the NFIB Optimism Index,” said NFIB President and CEO Juanita Duggan. “With a massive tax cut this year, accompanied by significant regulatory relief, we expect very strong growth, millions more jobs, and higher pay for Americans.”
The Optimism Index for last month came in at 104.9, slightly lower than the near-record November report but still a historically exceptional performance. That makes 2017 the strongest year ever in the history of the survey. The average monthly Index for 2017 was 104.8. The previous record was 104.6, set …read more