Small business owners are doing well – but will this help Trump overcome his low approval ratings? | Genetic marks

Tthere are 34 million small businesses in the United States. They employ about half of the country’s workers and generate about half of the country’s GDP. They constitute an important electoral bloc. So what do they think about the economy as the November midterm elections approach? Overall, economic sentiment toward Donald Trump is poor, but small businesses—admittedly from a diverse and difficult-to-survey demographic—seem pretty confident. A number of recently published surveys and reports can help understand their mood.

Trust is generally stable.

This week, the National Federation of Independent Business said its small business optimism index fell just below its long-term average, while uncertainty increased slightly. Quality of work was the main concern of 26% of owners and inflation was 20%. Expansion plans have weakened, although 17% still plan to create jobs in the next three months.

However, small business confidence improved significantly in the third quarter, according to the recently released Justworks/US Chamber Small Business Index. Some 72% of 750 small businesses surveyed say they are satisfied with their current cash flow, but only 27% believe the U.S. economy is in good health. Inflation remains the biggest problem, cited by 54% of homeowners.

Hiring is not strong, but not weak either.

HR platform Gusto estimates that small businesses created 28,000 jobs in September, making it the eighth consecutive month of employment growth following a decline in January. According to company data, hiring accelerated from August’s revised gain of 18,500 jobs and growth was broad across sectors, regions and company sizes, with health care and social assistance among the strongest sectors. Of particular note is that some of the smaller employers continue to participate in the expansion, rather than concentrating employment growth only in larger companies.

In its latest Small Business Employment Watch report, Paychex, another large HR and payroll processing service (and a client of my firm), said September hiring was essentially in line with its 2026 annual average, with overall employment at companies with fewer than 50 employees appearing “flat.”

ADP, the nation’s largest human resources and payroll processing service, reported that U.S. private employers added 90,000 jobs in September, with hiring accelerating for the first time since May after three months of slowing growth. Education, health care, leisure and hospitality led the gains, while financial activities and professional and business services were weaker. Importantly for small businesses, establishments employing one to 19 workers created 18,000 jobs. According to ADP, private sector employers have not entered a recession and, although hiring has slowed compared to previous periods, businesses continue to hire.

Intuit painted a slightly different employment picture. Its Intuit QuickBooks Small Business Index, based on data collected from its millions of QuickBooks customers, found that employment at U.S. businesses with one to nine employees fell by 7,000 jobs in September and that jobs declined across most industries and regions.

Revenues remain strong.

Intuit’s QuickBooks data shows that earnings rose sharply last month, with inflation-adjusted average monthly income increasing 1.68% and growth occurring in 11 of 12 industries, every region and 19 of 20 states.

Fiserv, a payment processing service, said its September data showed improving sales among U.S. small businesses. However, the company reports that consumer behavior remains selective and traffic has been lower even though customers are spending more when shopping.

Economic growth continued in the third quarter.

Overall, the U.S. manufacturing sector remained firmly in expansion territory in September. The Institute for Supply Management’s Manufacturing Purchasing Managers’ Index marked its ninth consecutive month of growth after years of contraction. Despite the rise in prices, new orders, production and employment remained expansionary and order books increased. As usual, the ISM reported another month of expansion in the services sector (27 consecutive months), with new orders remaining “particularly strong”.

The Wall Street Journal and other media sources recently reported that first-quarter annualized growth was revised to 2.5% from 2.1% and second-quarter growth was increased to 2.2% from 1.5%, which its editors say shows that “the U.S. economy is doing much better than the pessimistic headlines suggest.”

Philadelphia is lagging behind in business creation.

My company is based in Philadelphia, a heavily Democratic area in a swing state. My clients seem to be doing generally well so far this year, but, like most small businesses across the country, they continue to struggle to cope with higher costs and a tight labor market.

This anecdotal evidence is somewhat supported by a May survey by WSFS Bank, which found “surprisingly strong confidence among Philadelphia-area businesses” despite inflation and economic uncertainty. In this study, 92% of business owners and decision-makers say their business is meeting or exceeding expectations, while 66% anticipate growth over the next year.

Philadelphia, however, has its own problems, particularly regarding the number of small businesses per capita than other major cities. A recent Pew Research study found that the number of Black, Hispanic, and women-owned small businesses increased 39% between 2012 and 2022, demonstrating significant entrepreneurial growth, but barriers including access to capital, regulatory requirements, taxes, commercial space, and difficulty growing businesses continued to restrict business creation in the city.

Democratic strategist James Carville once said that when it comes to electing candidates, “it’s the economy, stupid.” The good news for Republicans is that the economy is resilient and the overall mood among small businesses across the country is generally upbeat, despite the many challenges they face. But will this overcome the president’s low popularity?