Small Business Optimism Declined in December

Owners who think it’s a good time to expand decreased 4 points to 8%. Sales expectations over the next three months declined 14 points to a net negative 4%. Earnings trends over the past three months declined 7 points to a net negative 14% reporting higher earnings. Concern about economic policy in the new administration and the increased spread of COVID-19 that is leading to renewed government mandated business closures have owners pessimistic about future conditions over the first half of 2021. The decline in expected business conditions and expected real sales accounted for two-thirds of the Index decline and will impact owner decisions about hiring, inventory investment, and capital spending.