Small-business owners are more optimistic than at any time since 2007 as their outlook for sales and economic conditions jumped this month, according to a closely watched private survey released Tuesday.
The optimism index from the National Federation of Independent Business rose to 98.1, up two points from November, the group said.
About 5 1/2 years after the end of the Great Recession, the index, which is one of the economic indicators the Federal Reserve monitors, finally has reached its 42-year average.
“Unfortunately, the index did not sprint past the average, which is typical of a strong recovery before settling back down," said Bill Dunkelberg, the group's chief economist.
"Instead it’s been a slow slog just to reach this point,” he said.
The rise was more than analysts had forecast. The increase came from jumps in two of the 10 measures the index tracks.
The biggest move was in expectations of small-business owners for the economy during the next six months.
That index component, based on the difference between the percentage of owners expecting improvement minus those expecting conditions to worsen, rose 16 points from October.
The other area of significant improvement was in sales, with that index component up 5 points.
The group speculated the improved outlook might have been a reaction to strong Republican gains in last month's congressional midterm elections.
The increased optimism "isn't translating yet into a flurry of job creation or capital investment among small-business owners," Dunkelberg said, but he called it a positive sign.
“It’s a little early to declare a breakout," he said.
"This performance will have to be consolidated by several more positive readings before owners are confident to hire more employees and expand their business," he said.
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