Small business optimism is at its highest since 2004. This could mean a lot for the U.S. economy.

The National Federation of Independent Business (NFIB) Index of Small Business Optimism reached an over decade-long high on Tuesday. As a leading indicator of economic growth, the NFIB Index of Small Business Optimism recorded a second consecutive month of growth in business optimism, especially in regard to the “Expect Better Business Conditions” category.

Economic growth isn’t simply indicated by one specific factor such as unemployment, but includes the consideration of several key economic circumstances. Job growth, payroll increases, investment levels and the like are all pertinent to pinpointing economic conditions.

Job growth in December slowed, but wages increased. The rebound in wages illustrates growth in the labor market – growth that is vital to predicting near-future economic conditions. Although the unemployment rate ticked up in December, the increase in payroll averages is critical to future jobs investments.

The unemployment rate up-tick in December to 4.7 percent is still below the 4.8 percent mark, which is the natural unemployment rate. However, the latter figure only illustrates just over half of the nation’s true unemployment rate since it doesn’t include individuals who have given up looking for employment or who work part-time due to their inability to find full-time work. That broad strokes percentage is at 9.2 percent. Both the natural and broad strokes unemployment figures at are at record lows for the Obama Administration.

Since companies classified as small businesses make up a majority of the American economy, their business prospects are especially critical to the health of the economy. And 2017 is looking good for small businesses. Approximately 82 percent of small businesses are planning to grow their companies in 2017. From hiring new staff, to expanding their business model, or even moving office locations, small businesses are set to expand in 2017.

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