Small Business Optimism Explodes

Peter Boockvar on the Trump Bump in small business optimism, which is undeniable – even if you’re in the camp that it is ill-founded. From my perspective, anything that gets the juices flowing and the velocity of money spinning again is a positive, not a negative, regardless of one’s political affiliations.

All Hail Trump! said US small businesses in December after expressing optimism too in November. The NFIB small business optimism index spiked by 7.4 pts to 105.8 after rising by 3.5 pts in November. This is the highest since 2004 and I had to go back to July 1980, 4 months before Reagan was elected but after a plunge in the months before, to find a one month gain as much as this. Some of the month to month changes in the internal components were big too. Those that Expect a Better Economy rose 37 pts to 50%, the most since March ’02. Those that Expect Higher Sales was up by 20 pts to 31% and those that said it’s a Good Time to Expand was up by 12 pts to 23%.

Digger deeper, those that Plan to Increase Capital Spending was up by 5 pts to 29%, matching the most since 2007 and of course has been a key missing piece of this mediocre recovery since 2009.

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Peter Boockvar
Managing Director, Chief Market Analyst
The Lindsey Group LLC

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