Economic optimism among small business professionals is on the rise for the third month in a row coming into February. Overall economic sentiment is up by 7.8 percent since October, a notable turnaround following a less hopeful summer and fall.
Continuing Growth = Growing Headcount
Nearly 60 percent of the 5,842 small business owner-operators we surveyed this month believe that their business will improve in the weeks ahead, a bump of over 10 percentage points from September of last year.
This surge in optimism is starting to have very real effects on the U.S. labor market: 44 percent of small businesses with one or more employee are planning to expand their payroll in months to come.
This is also the trend for professionals currently operating as sole proprietors, and swelling optimism among both groups of professionals has buoyed hiring expectations for small business owner-operators on Thumbtack to an eight-month high.
Early Signs of Partisan Influence
For the first time since the election, optimism is starting to diverge along political lines. Almost 80 percent of professionals who identify as conservatives believe that the economy is likely to improve in months to come. And they’re hiring for it too: over a quarter of conservatives plan to expand their headcount in the next three months.
These numbers are significantly lower among self-described liberal professionals on Thumbtack; in the early days of the Trump administration, only 33 percent of left-leaning small business owners anticipate a better economy overall.
Despite these differences in how liberal and conservative professionals view the economy at large, when it came to their own businesses, professionals across the political spectrum agreed that the future is bright.
Even professionals who expressed disappointment when asked whether or not they agreed with the Trump administration’s transition to the White House believe that their businesses will do better (74 percent) rather than worse (21 percent) in the coming months.
A Nationwide Swell
Virtually every part of the country experienced an increase in economic optimism from October, including all 15 of the biggest states—11 of which saw additional increases from last month’s near-record highs. Illinois and Virginia experienced the biggest gains in the last two months, up by 15 and 10 percent, respectively. Only Arizona, Colorado, Michigan, and Massachusetts—a sporadic set of outliers—saw their economic optimism drop from December levels.
These gains also swept all active industries on Thumbtack, with professionals in transportation and moving and landscaping and lawn care reporting the highest levels of growth in sentiment since the uptick began in November.
Every month, the Thumbtack Economic Sentiment Survey captures the attitudes and perspectives of thousands of business owners from across the country to gauge how they are feeling about the economy and their businesses. Now in its fourth year, this survey provides a unique vantage point on the economy, as respondents are largely mobile service professionals with five or fewer employees who operate in households across the United States. Because they are hard to reach, these professionals are frequently overlooked in other surveys of small businesses.