WASHINGTON, D.C. (Dec. 11, 2024) – NFIB Research Center Executive Director Holly Wade joined Brad Smith of Yahoo! Finance to discuss this month’s Small Business Optimism Index, which rose above the 50-year average in November for the first time since 2021.

Wade shares data from NFIB’s November SBET survey and explains the factors leading to the increase in optimism among Main Street owners, such as expectations for improved business conditions and higher sales in the coming months.

Watch Wade’s interview here: https://finance.yahoo.com/video/small-business-optimism-jumps-highest-173047900.html

“Small business owners are far more optimistic these days. The last month we saw a huge surge in our index looking at small business optimism. The biggest contributor to that was general business conditions. Far more small business owners were saying that they anticipate business conditions improving over the next six months…Small business owners [are eager] to see a dramatic change or shift in priorities on economic policy. So, they have a lot of expectations going in to 2025 on what that looks like for them as far as tax policy and also the regulatory environment.

“The Tax Cuts and Jobs Act of 2017 that’s set to expire – especially the 20% Small Business Deduction that they have relied on for the last number of years – is set to expire. So, we have a year, 12 months, for Congress and the Administration to extend or, preferably, make permanent those provisions that have been so helpful. Small business owners were worried about what the elections might look like as far as tax policy and tax reform, if they would end up seeing a tax increase at the end of next year. And so, they’re a bit more confident…We also saw a dramatic decrease in our Uncertainty Index, which was also a good sign that they feel more comfortable about what to expect going forward.

“About one in five small business owners are saying that labor quality is their biggest issue in operating their business. So, it remains a tight labor market for small firms, especially in industries including construction and transportation. Those are the two dominant industries that we see in our survey as far as challenges in hiring, filling those very historically high level of job openings still…But still right now we’re seeing a lot of compensation increase pressure, as far as increased costs in operating their business, to retain and recruit applicants for those positions. So, labor is still a significant challenge out there.”