Small business optimism in December was historically strong, with a reading of 102.7, down two points from November. Seven of 10 components declined, two improved, and one was unchanged. More small business owners reported better business conditions and expect higher nominal sales in the next three months. Although frequency of plans to raise compensation dropped two points, it remains one of the highest readings in the survey’s 46-year history. Small businesses continued to hire and create new jobs, with actual job creation matching November’s reading—the highest since May.

Although the NFIB Uncertainty Index rose eight points in November to 80, owners expecting better business conditions increased three points to a net 16%. A seasonally adjusted net 19% plan to create new jobs, down two points. Finding qualified workers remains the top issue for small business owners, with 23% reporting this as their No. 1 problem. A net 29%, seasonally adjusted, reported raising compensation (down one point) and a net 24% plan to do so in the coming months, down two points.