Small business sentiment is back to normal – and that’s worth celebrating

Original Article

Don’t be surprised if you see a small business owner popping a couple extra bottles of bubbly come New Years Eve. It’s been quite some time since employers were feeling this upbeat heading into a new year.

After plunging during the recession and inching its way back the last few years, optimism among the nation’s small business owners has finally rebounded to levels in line with the historical average, according to the latest readings by the National Federation of Independent Business. The index climbed from 96.1 in October to 98.1 in November, well exceeding economists’ forecasts of 96.5.

It’s the highest level of recorded optimism since the start of 2007.

Bill Dunkelberg, NFIB’s top economist, noted in the report that “expectations for business conditions six months out rose a huge 16 percentage points, while expectations for real sales volumes rose 5 percentage points.”

While “it’s a little early to declare a breakout,” Dunkelberg added, “it’s a good sign that comes at a good time for small business.”

Days earlier, Gallup and Wells Fargo released their own monthly employer optimism polling, with strikingly similar results. It too shows that optimism among small employers hasn’t been higher since the start of the recession in 2008. Most of the optimism, the groups noted, stems from owners’ increasingly positive expectations for the coming months.

In particular, employers are upbeat about their finances – a complete turnaround from the last couple years. Seven in 10 small business owners said they expect their overall financial health to be very or somewhat good next year, and more are planning to invest back into their companies.

“Small businesses are healthier and are on much more solid footing as they look toward 2015,” Lisa Stevens, head of regional banking sales and marketing at Wells Fargo, said in a statement accompanying the report.

The strong optimism readings come only a week after reports of continued job growth on Main Street. Data collected by payroll company ADP showed that small businesses added 101,000 workers in November, marking the first back-to-back months of six-figure job growth since early 2012.

Small business owners aren’t expecting things to slow down during the last month of the year, either. Separate polls by Capital One and American Express last month showed that employers are much more upbeat about the holiday season than they have been in recent years. Meanwhile, many say their sales numbers are rising, and they expect the momentum to carry over into 2015.

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