According to a survey of the owners of small business in the United States, a giant leap for small businesses was denoted by President-elect Donald Trump’s victory in the U.S. elections.
With all of the increase in sentiment coming after the U.S. elections held on Nov. 8, the sharpest surge since 2009 was noted in the November reading of the National Federation of Independent Businesses’ small business optimism index when it jumped to 98.4 from 94.9.
“This month we bifurcated the data to measure the results before and after the election,” explained Chief Economist Bill Dunkelberg. “The November index was basically unchanged from October’s reading up to the point of the election and then rose dramatically after the results of the election were known.”
With regards to the balance of opinion on whether business conditions were expected to improve skyrocketed from a reading of -6 to a whopping +38 among those who were surveyed following the election.
And reaching its high level since 2014 was this subindex improved to 12, from -7 for the month as a whole. Similarly, there was jump pof 10 percentage point in the balance of opinion on sales expectations which reached +11.
“Small businesses like unified Republican government,” said Neil Dutta, head of U.S. economics at Renaissance Macro Research LLC. He however noted that NFIB’s index had recorded a solid rise in November 2004 after voters granted George W. Bush a second term while the same index had fallen in November 2012 — when Obama won re-election.
For firms that earn more revenues domestically — a category most small businesses fall into, Trump’s plan to cut corporate taxes offers the most benefit on a relative basis. Dunkelberg said that higher optimism among small business owners was also driven by the possibility that there could be a roll back in regulation and help fulfill the real-estate mogul’s pledge to repeal Obamacare by the possibility that Linda McMahon’s actions, who Trump nominated to lead the Small Business Administration.
When compared on both of the actual sales and the earnings changes, the balance of opinion remained steeply negative for the vast majority of segments that showed improvements in November’s survey and they were all forward-looking in nature.
In addition to the ones like the University of Michigan’s December report which showed that consumers; assessment of current government economic policy rose to its highest level since 2009, this new The NFIB reading is the latest in a number of gauges that are tracking sentiment in the U.S. economy and which have reportedly soared since the election according ot the gauges.
(Adapted from CNBC)