According to ActionForex, analysts at TD Bank Financial Group note that the NFIB’s small business optimism index declined by 5.5 points to 95.9 in December, coming in considerably lower than market expectations of 100.5.

• "Beneath the surface, the declines were broad-based, with nine of the ten subcomponents falling on the month. Expectations for the economy to improve over the next 6 months spearheaded the declines, plunging by 24 points to a net negative 16%. This was followed by expectations for higher real sales (-14 points to -4%) and earnings trends (-7 points to -14%)."
• "Similarly, the view that now is a good time to expand and plans to make capital expenditures in the near-future retreated by 4 points apiece to 8% and 22%, respectively. Meanwhile, the share of small businesses viewing current inventory stocks as too low increased by 2 points to an all-time high of 7%."
• "Confidence among American small businesses took a serious hit in December. While a contraction was largely expected given a sharp increase in new COVID-19 infections and the reintroduction of restrictions across the U.S. toward the end of last year, the severity of the decline came as a surprise. In fact, the December pull-back was one of the steepest in the index’s history."
• "Economic and business conditions will likely get worse before they get better. New COVID-19 cases have picked up again in early January, while reports of strained hospitals in several states have multiplied in recent weeks. Other downside risks include new variants of the coronavirus, which appear to spread more easily. The good news is that vaccine distribution, which was slowed by logistical hurdles early on, should accelerate over the coming months."