Small Business Optimism Hot Streak Reaches Two-Year Mark

It’s been a little while since we last checked in on the National Federation of Independent Business’s small business optimism index but things seem to still be going strong. In fact the NFIB notes that this month marks two straight years where small business optimism has remained at historically high levels. Furthermore, coming at 107.4, October’s figure is only 1.4 points off of the all-time record 108.8 set in August of this year.

In a statement regarding the 24-month hot streak, NFIB President and CEO Juanita D. Duggan said, “For two years, small business owners have expressed record levels of optimism and are proving to be a driving force in this rapidly growing economy.” She went on to discuss this past month’s results, stating, “The October optimism index further validates that when small businesses get tax relief and are freed from regulatory shackles, they thrive and the whole economy prospers.” Meanwhile NFIB Chief Economist Bill Dunkelberg offered similar sentiments, saying, “Thanks to a number of factors, including the federal government’s loosening grip on the private sector, the U.S. regained the top spot in the World Economic Forum’s ranking as the most competitive country during the month of October. An unburdened small business sector is truly great for employment and the general economy.” He concluded, “October’s report sets the stage for solid economic and employment growth in the fourth quarter, while inflation and interest rates remain historically tame. Small businesses are moving the economy forward.”

Despite the continued rosy outlook, it seems that the hiring woes small business owners have been facing aren’t going away. With the national unemployment rate a 49-year low of 3.7%, many entrepreneurs say they’re having trouble filling open positions. According to the NFIB survey, 60% of small business owners report trying to hire but 53% of those surveyed note they’ve had few or no qualified applicants for the positions. Among those actively looking to hire, that figure climbs to 88%. As a result, 38% of respondents say they have open positions they cannot fill — tying last months record high. In a bid to attract (or retain) talent and fill open positions, 23% of employers say they plan to increase compensation while 34% say they have raised wages. These figures seem to line up with the government’s recent jobs report that shows a 3.1% year over year gain in wages as well as a 5¢ increase for October, bringing the average hourly wage to $27.30.

While October’s NFIB small business optimism index was largely more of the same, that’s also what makes it notable. Of course one would be remiss not to point out the two year anniversary of this record optimism takes us back to November 2016 — the month in which President Donald J. Trump was elected. Through some of the turmoil that’s come in the past two years, which may have played a role in Democrats retaking the House of Representatives during this month’s midterm elections, it seems that small business owners are still backing the administration’s economic policies. With a split Congress taking office in January, it will be interesting to see if the change impacts any of those policies and whether optimism will begin to slip as a result. Stay tuned.

Thisis a good news for evryone, not only for small business owners but for employees and economy as well.

More Americans are having the confidence of starting their own business which also means more job opportunity.

Comments are closed.

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

Other Articles by Jonathan Dyer

Carbon Credit API Cloverly Joins Visa's FinTech Partner Connect 

Last year, Visa introduced the FinTech Partner Connect program to the United States, with the goal of introducing institutions to vetted startups that could help them expand their product offerings. Now, the latest company to join the program is Cloverly. Founded in 2019, Cloverly is an API for carbon credits, allowing businesses and consumers to help fight climate change. As the company points out, with the Visa partnership, Visa clients...

Prosper Announces $75 Million Growth Capital Financing

A long-admired FinTech has added some new capital to its coffers and it continues to grow after more than 15 years in business. Recently, Prosper Marketplace announced that it had closed a $75 million debt financing round. This capital came from a fund managed by Neuberger Bergman and will be used to help Prosper meet the demand for its loans, credit card, investment products, and more. According to the company,...

Small Business Saturday 2022 Drives Projected $17.9 Billion in Sales

This past weekend saw the kick-off to the holiday shopping season with Black Friday followed by Small Business Saturday. Now in its 13th year, the latter is a promotion meant to raise awareness for small local businesses and encourage consumers to support them. Now, the initial figures from this year's event have arrived. According to American Express (which actually invented the retail holiday in 2010), an estimated $17.9 billion were...