The October NFIB Small Business Optimism Index rose to 103.8, up from 103 in September. The historically strong performance extends the streak of positive months dating back to last November, when it shot up immediately following the election, according to the NFIB Small Business Economic Trends Report.
“Owners became much more positive about the economic environment last month, which suggests a longer-run view,” said Bill Dunkelberg, NFIB chief economist. “In the nearer term, they are more optimistic about real sales growth and improved business conditions through the end of the year.”
Four of the Index components rose last month. Five declined slightly, while one remained unchanged. Outlook for expansion and sales expectations each jumped six points, while job openings increased by five points.
The tight labor market got tighter for small business owners last month, continuing a year-long trend. Fifty-nine percent of owners said they tried to hire in October, with 88 percent of them reporting no or few qualified applicants. Hiring activity was particularly high in Florida and Georgia, as construction firms are still trying to meet higher demand caused by the recent hurricane.
“Consumer sentiment surged based on optimism about jobs and incomes, an encouraging development as consumers account for 70 percent of GDP,” said Dunkelberg. “We expect a pickup in auto spending as people in Texas and Florida continue to replace cars that were damaged in the hurricanes. We expect the same increase in home improvement spending, partly because of the hurricanes, but also because of the skyrocketing price of homes.”