Small business owners became a lot more optimistic about the economy in November, an improvement that may have been related to the success of the Republican Party in the midterm elections.
The National Federation of Independent Business reported Tuesday morning that its index of small business optimism jumped 2 points to 98.1 in November, reaching its highest level since February 2007, before the recession began.
At 98.1, the index is just below its historical average. But small business owners expressed high hopes for the months ahead, with the number expecting the economy to improve over the next six months leaping by 16 percentage points.
“It’s a little early to declare a breakout. This performance will have to be consolidated by several more positive readings before owners are confident to hire more employees and expand their business. But it’s a good sign that comes at a good time for small business,” said Bill Dunkelberg, the NFIB’s chief economist, in a note accompanying the release of the index.
The NFIB survey noted that expectations for the economy and sales improved significantly in November, and the share of owners blaming the “political climate” for not being able to expand fell.
“So it appears likely that the election outcome played a significant role in improving the Index of Small Business Optimism,” the report notes, later adding that “[w]hat is needed is a translation of this optimism into spending and hiring.”
Republicans expanded their control of the House and gained a majority in the Senate in the midterm elections held Nov 4.
Business and consumer confidence have risen in recent months as good news about the economy has mounted. The Bureau of Labor Statistics reported Friday that the U.S. added 321,000 payroll jobs in November, making 2014 the best year for job creation since 1999 with a month left to go.
