US small business confidence rockets on expectations for Trump

Small business confidence in the US ended 2016 on a high note on optimism regarding the outlook for the economy under the incoming administration.

The National Federation of Independent Business' s gauge of small business sentiment jumped from 98.4 in November to 105.8 - a 12-year high.

Economists had penciled in a print of 99.5.

The chief factor behind the improvement was a 38-point surge in the economic expectations sub-index to the 50-point level, alongside a 20 point improvement in a gauge of sales expectations while a barometre tracking whether now was a 'good time to expand' increased by 12 points.

"These numbers are all quite volatile, however, and it's not clear exactly what has propelled them higher, apart from an apparently strong conviction that the Trump administration will be good for business. The hard data are much less exciting, though the five-point jump in capex intentions is very welcome.

"The data today are not new. Overall, this is a hugely strong report, but spending and sentiment are not the same thing, and we need to see hard evidence that the latter is translating into the former, even in the face of higher interest rates and the strong dollar," said Ian Sheperdson, chief economist at Pantheon Macroeconomics.