Optimism among U.S. small-business owners is higher than it’s been in months.
A National Federation of Independent Business index of sentiment rose 1.3 points to 91.9 in December, which represents the highest since July and matches the best reading of 2023, the group said Tuesday. Bloomberg reported that small-business owners were “less downbeat about the outlook for business conditions,” while a net 4% expect lower sales in the next three months, the smallest share in nearly two years.
While small businesses are generally still downbeat about the economy, their views seem to be stabilizing rather than getting worse, according to Bloomberg. Federal Reserve officials have said they’re done raising interest rates – for now, at least – with inflation slowing and the job market remaining resilient, reinforcing expectations that the U.S. will avert a recession.
“Small-business owners remain very pessimistic about economic prospects this year,” NFIB Chief Economist Bill Dunkelberg, said in a statement, according to Bloomberg. “Inflation and labor quality have consistently been a tough complication for small business owners, and they are not convinced that it will get better in 2024.”
A net 25% of firms reported higher prices in December compared to three months ago, holding at the lowest level since early 2021. However, that share was more in the range of 10% to 15% in the two years leading up to the pandemic.
