According to the National Federation of Independent Business, the small business optimism index hit a 12-year high in December, rising from 98.4 in November to 105.8. A one month gain hasn’t been this big since 1980. The NFIB says this increase is directly correlated to the surprising win from President-elect Trump this past November.
Because Trump promises to cut taxes, invest in infrastructure, increase jobs and repeal Obamacare, business owners are expecting higher wages and more capital spending in the next six months. Even so, some experts are cautioning small business owners to heed their expectations, saying that economic growth may not increase as much as many are hoping for.
Jim O'Sullivan, chief U.S. economist at High Frequency Economics, a research firm, says the small business index is slanted, given that most respondents to NFIB’s survey are usually Republican. "I do think that hopes have been probably raised too much here and there will probably be a little bit of disappointment," he said.