The small business optimism in the United States surged in December to its highest level in over eight years, signaling towards a strengthening American economy despite darker clouds in the global context.
The outlook was further boosted by other data released on Tuesday showing the improving labor market, with the job openings approaching a 14-year high in November.
Gus Faucher, a senior economist at Pittsburgh-based PNC Financial Services, “There are concerns about global growth, but the fundamentals for the US economy are very solid and what’s going on overseas should only be a minor drag.”
According to the National Federation of Independent Business, its Small Business Optimism Index rose 2.3 points to 100.4 in December.
This is the highest reading recorded since October 2006.
The index, which is returned to its pre-recession average, was encouraged by a rise in sales expectations, hiring, business expansion plans and capital outlays.
In another report, the US Labor Department said that the job openings, rose 2.9 percent to a seasonally adjusted 4.97 million in the month of November, reaching the highest level since January 2001.
Chris Rupkey, chief financial economist at MUFG Union Bank in New York, said that this is another sign “that shows the labor market of the country is tightening up and we are already starting to see more help wanted signs out there in store windows.”
The small business sector of the United States accounts to nearly half of its overall gross domestic product (GDP) and makes up the largest share of hiring.