US small business confidence stuck in below-average rut in December, NFIB says

US small business confidence edged higher last month but the sector faced uncertainty with government policy-makers likely to be paralysed ahead of this year's presidential election, according to the National Federation of Independent Business.

The NFIB's index of small business optimism edged higher in December by 0.4 points to 95.2, but that remained "well below" the gauge's 42-year average of 98.0, NFIB chief economist Bill Dunkelberg said in a statement.

Historically, small businesses accounted for approximately half of private gross domestic product, the lobby group explained.

Below average growth for small businesses had not been offset by the pace of expansion at large firms and policy paralysis ahead of the elections meant that "prospects for any other substantive policy changes in 2016 are not good", Dunkelberg said.

"It is unlikely that 2016 will produce any major changes as the politics of the election will suck the oxygen out of serious policymaking."

As well, savings at the gasoline pump in 2016 might be offset by losses at the light switch should new regulation from the Environmental Protection Agency for power generation go into effect, he cautioned.

A sub-index of small companies' outlook for general business conditions retreated from a reading of -7 in November to -14 in December.

It was also too early to expect businesses to have assimilated the Federal Reserve's decision to hike interest rates in December, the NFIB said.