Small Business Optimism Rose to 105.1 in December

Washington, DC, January 14, 2025-The NFIB Small Business Optimism Index rose by 3.4 points in December to 105.1, the second consecutive month above the 51-year average of 98 and the highest reading since October 2018. Of the 10 Optimism Index components, seven increased, two decreased, and one was unchanged. The Uncertainty Index declined 12 points in December to 86.

“Optimism on main street continues to grow with the improved economic outlook following the election. Small business owners feel more certain and hopeful about the economic agenda of the new administration. Expectations for economic growth, lower inflation, and positive business conditions have increased in anticipation of pro-business policies and legislation in the new year,” says NFIB chief economist Bill Dunkelberg.

The net percent of owners expecting the economy to improve rose 16 points from November to a net 52% (seasonally adjusted), the highest since the fourth quarter of 1983.

  • The percent of small business owners believing it is a good time to expand their business rose six points to 20%, seasonally adjusted. This is the highest reading since February 2020.
  • The net percent of owners expecting higher real sales volumes rose eight points to a net 22% (seasonally adjusted), the highest reading since January 2020.
  • A net 6% (seasonally adjusted) of owners plan inventory investment in the coming months, up five points from November and the highest reading since December 2021.
  • Seasonally adjusted, a net 29% reported raising compensation, down three points from November and the lowest reading since March 2021.
  • A net 1% of owners reported paying a higher rate on their most recent loan, down four points from November and the lowest reading since September 2021.
  • Twenty percent of owners reported that inflation was their single most important problem in operating their business (higher input and labor costs), unchanged from November and leading labor quality as the top issue by one point.