It seems small-business optimism is on the way up. I wonder why? Excerpt:
Optimism among America’s small businesses soared in December by the most since 1980 as expectations about the economy’s prospects improved dramatically in the aftermath of the presidential election.
The National Federation of Independent Business’s index jumped 7.4 points last month to 105.8, the highest since the end of 2004, from 98.4. While seven of the 10 components increased in December, 73 percent of the monthly advance was due to more upbeat views about the outlook for sales and the economy, the Washington-based group said.
The share of business owners who say now is a good time to expand is three times the average of the current expansion, according to the NFIB’s data. More companies also said they plan to increase investment and keep hiring, which reflects optimism surrounding President-elect Donald Trump’s plans of spurring the economy through deregulation, tax reform and infrastructure spending.
“Rising confidence adds to the economy’s upward momentum,” Jim O’Sullivan, chief U.S. economist at High Frequency Economics in Valhalla, New York, said in a note. At the same time, 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.”
The NFIB report was based on a survey of 619 small-business owners through Dec. 28. Small companies represent more than 99 percent of all U.S employers, according to the U.S. Small Business Administration. A small business is defined as an independent enterprise with no more than 500 employees.
Why is this important? Because small businesses are the engine of job growth and job creation in our economy. Take a look at this line from the story: The share of business owners who say now is a good time to expand is three times the average of the current expansion, according to the NFIB’s data. More companies also said they plan to increase investment and keep hiring…
That’s key. A big company like Ford or Microsoft is fairly stable; they hire, but mostly to replace employees lost through attrition. But a small business may have two employees this year, ten next year, and a hundred the year after that.
That’s where job creation happens. That’s where economic growth comes from. And the incoming Trump Administration, at least as judged by this group of small business owners, is expected to be great for small business.
One of the most onerous burdens a small business has to deal with (bear in mind yr. obdt. is a small business owner) is Imperial taxes and regulation; The Donald has promised to ease both of those burdens. If he can do this, and if it’s the only thing he manages to do in the course of his administration, he will have justified the votes of the people who supported him.