Small Business Owners in October Were More Optimistic Despite Record Uncertainty

Small business owners were more hopeful about the economy in October, despite uncertainty that hit record highs ahead of the election. 

The National Federation of Independent Business (NFIB) Small Business Optimism Index moved 2.2 points higher in October to reach 93.7, with owners reporting lower sales and persistent inflation.

“Although optimism is on the rise on Main Street, small business owners are still facing unprecedented economic adversity,” said NFIB Chief Economist Bill Dunkelberg in a prepared statement. “Low sales, unfilled jobs openings, and ongoing inflationary pressures continue to challenge our Main Streets, but owners remain hopeful as they head toward the holiday season.”

Uncertainty Surges Ahead of Election

In October, small business owne also expressed their highest levels of uncertainty in the 51-year survey history. The monthly survey of small business owners was conducted before the November election results, so uncertainty is likely to decline in coming readings.

“With the election over, small business owners will begin to feel less uncertain about future business conditions,” Dunkelberg said.

According to Moody’s Analytics, small business owners may also feel more optimistic after Donald Trump’s win in the presidential election.

Moody’s research shows that small businesses feel better about their economic prospects when there is a Republican president and even more so when deregulation and tax cuts are a part of the fiscal policy plan.

“There is upside risk to small businesses from expected deregulation under the Trump administration and the potential for lower corporate taxes,” wrote Economist Justin Begley. “However, broad-based tariffs will likely raise operating costs for many, pinching margins.”