The United States is home to 34 million small businesses, which account for roughly half of the nation's workforce and generate about half of its gross domestic product. As a vital electoral demographic, their economic perspective heading into the November midterms is significant. While broader sentiment regarding Donald Trump is negative, small business owners present a more optimistic, albeit complex, outlook according to recent data.
Confidence levels remain relatively steady. The National Federation of Independent Businesses reported that its Small Business Optimism Index dipped slightly below its long-term average while uncertainty grew. Labor quality emerged as the primary worry for 26 percent of owners, followed by inflation at 20 percent. Although expansion plans moderated, 17 percent of businesses still intended to create new jobs over the subsequent three months.
Conversely, the Justworks and US Chamber Small Business Index noted a substantial increase in third-quarter confidence. Among the 750 surveyed enterprises, 72 percent expressed comfort with current cash flow, though only 27 percent viewed the broader US economy favorably. Inflation persisted as the dominant challenge, highlighted by 54 percent of respondents.
Employment trends show neither robust acceleration nor contraction. The human resources platform Gusto estimated that small businesses generated 28,000 positions in September, marking eight consecutive months of job growth following a January dip. Hiring expanded across various sectors, regions, and company scales, with healthcare and social assistance performing particularly well.
Paychex reported that September hiring aligned with its average for the year, indicating stable employment among firms with fewer than 50 workers. Meanwhile, ADP stated that US private employers added 90,000 jobs in September, representing the first acceleration in hiring since May. Establishments with one to 19 workers contributed 18,000 of those positions.
In contrast, Intuit offered a more reserved employment outlook. Its QuickBooks Small Business Index indicated that firms with one to nine employees lost 7,000 jobs in September, with contractions spanning most geographic regions and industries.
Despite mixed hiring indicators, revenues stayed resilient. Intuit reported a 1.68 percent inflation-adjusted increase in average monthly revenue, with gains observed across 11 of 12 industries and nearly all states. Fiserv observed rising sales among small enterprises, noting that while consumer traffic softened, shoppers spent more per transaction.
Broader economic expansion persisted through the third quarter. The Institute for Supply Management indicated that manufacturing grew for the ninth straight month, supported by steady new orders and production. The service sector also extended its growth streak to 27 months. Additionally, revised figures showed annualized growth reaching 2.5 percent in the first quarter and 2.2 percent in the second quarter.
Local observations from Philadelphia, a Democratic stronghold in a swing state, suggest that enterprises continue to navigate elevated expenses and labor shortages successfully, reflecting the broader national narrative of resilient small businesses facing persistent cost pressures.