Small business owners are more optimistic about the economy than at any time since June 2021 following President-elect Donald Trump’s victory in November, recent data shows.
The National Federation of Independent Businesses’ (NFIB) Small Business Optimism Index spiked in November, rising by 8 points and reaching its highest level since June 2021. Economic concern on main street also saw a major decline for the month, with the NFIB’s Uncertainty Index falling 12 points.
“The big factor leading to the jump in optimism [in November] was Trump’s victory,” Alfredo Ortiz, CEO of Job Creators’ Network Foundation (JCNF), told the Daily Caller News Foundation. “Small business owners are excited for a true breath of fresh air after four years of policies that restricted small business growth.”
Unless Congress acts, the vast majority of Americans will see higher, more complicated taxes beginning in 2026 as major provisions from the Tax Cuts and Jobs Act (TCJA) of 2017 expire.
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— Tax Foundation (@TaxFoundation) December 26, 2024
JCNF’s November Small Business Intelligence Quotient (SBIQ) poll found small businesses supported Trump over Vice President Kamala Harris by a 17-point margin of 51% to 34%, with more than 60% of owners saying they are optimistic the Trump administration will help small businesses.
“Small businesses are anticipating that a Republican-controlled government will be able to secure the border, balance the budget and make the Tax Cuts and Jobs Act (TCJA) permanent,” Ortiz told the DCNF.
The TCJA — implemented by Trump in 2017 — allows small business owners to deduct up to 20% of their qualified business income (QBI), which typically consists of their net income minus investment income, interest income and income from businesses operating outside of the U.S. Harris had previously called for the TCJA to be scrapped, which would have resulted in the loss of the QBI deduction and thus a major tax increase for many small business owners.
The QBI, along with a slew of other TCJA provisions, are set to expire in 2025, though Trump and other Republican lawmakers hoping to preserve the legislation.
Elevated inflation dogged small businesses during the Biden administration, with 49% of small business owners citing it as their biggest concern in a May JCNF poll obtained exclusively by the DCNF. The same survey found 67% were worried that current economic conditions could force them to close their doors, ten percentage points higher than just two years prior.
The economic pain felt by small business owners due to price increases came amid a surge in inflation, with topline inflation rising from just 1.4% when President Joe Biden took office in January 2021 to a peak of roughly 9% year-over-year in June 2022. Overall, prices have increased more than 20% under the Biden administration.
From August 2023 to August 2024, small businesses with less than 10 employees cut more than 43,000 jobs, while roughly 1.7 million more Americans had to take part-time jobs, according to a report from House Ways and Means Committee Chairman Jason Smith.
“The small business community is obviously excited about what the incoming Trump administration could mean for the economy,” Elaine Parker, President of the JCNF, wrote in a statement accompanying the JCNF’s November poll results. “It will be a breath of fresh air following four years of policies that have thrown cold water on small business hiring and expansion.”
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