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The group's index of small business confidence rose to 105.8,
its highest since December 2004. It was up 7.4 points from the
prior month, which was its biggest monthly increase since the
14.52 point increase in July 1980.
“The December results confirm the sharp increase that we
reported immediately after the election,” NFIB's chief economist
Bill Dunkelberg said in a statement.
“In this month’s report, we are also finding evidence that
higher optimism is leading to increased business activity, such
as capital investment,” Dunkelberg added.
Consumer and business sentiment about the economy has risen
sharply based on the notion the incoming administration of
Republican President-elect Donald Trump and a
Republican-controlled Congress would enact big tax cuts and
infrastructure spending and loosen regulations, which would
boost spending and investments.
"The NFIB membership appears to be disproportionately
Republican, so it is possible that the data will start
overstating strength, opposite the pattern during the Obama
administration. In general, however, confidence measures have
been moving up," said Jim O'Sullivan, chief U.S. economist at
High Frequency Economics.
Meanwhile, independent business owners were reluctant to hire
more workers in December despite the burst of post-election
optimism, NFIB said.
Job creation edged up by 0.01 workers per firm and job openings
fell 2 points, according to NFIB jobs data released last week.
It showed small business owners have struggled to find qualified
workers.
"That’s good news for workers because they can command higher
compensation, but many small business owners aren’t yet
confident enough to raise prices to offset the higher labor
costs," Dunkelberg said.
(Reporting by Richard Leong in New York; Editing by Jeffrey
Benkoe)
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