Chart of the Week

The chart shows that the percentage of small-business survey respondents planning to hire has increased over the past six months, while the percentage of job seekers who find jobs plentiful has continued a year-long decline.

Small businesses are the main engine for national job creation, responsible for 70% of new jobs created since 2019, and we expect small-business optimism to drive job-seeker confidence higher into 2026. We also believe that deregulation centered on health care, energy, and financial services will support job creation and broader business expansion.

We believe the tailwinds from tax cuts, deregulation, and lower interest rates are mutually reinforcing.

• Business tax cuts for capital spending should promote business expansion and modernization.
• Lower borrowing costs should encourage hiring and raise wage growth by helping workers produce more in a day at lower average cost.
• And, in turn, improved worker productivity should limit price inflation.

These converging trends should drive improved margin and earnings growth, equity market breadth, and consumer spending that we expect will push aside the current economic soft patch by early 2026.

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