Small Business Resilience Clashes with Trump’s Plummeting Approval Ahead of Midterms

Key points

• Small business confidence is stable but cautious, with the National Federation of Independent Business index falling slightly below its long-term average while uncertainty rises.
• Employment data is mixed: Gusto and ADP report job gains, including among the smallest employers, while Intuit reports a decline in jobs for businesses with one to nine employees.
• Revenues are rising, with inflation-adjusted monthly revenue increasing by 1.68% in September, and manufacturing and service sectors showing consecutive months of expansion.
• Inflation remains the primary concern for 54% of small business owners, while labor quality issues affect 26%, complicating the narrative of broad economic health.
• Philadelphia, a swing state hub, shows strong local business confidence but faces structural barriers to new business formation, particularly for minority and female-owned enterprises.

Background

This economic snapshot arrives as Democrats maintain a significant advantage in the 2026 midterm races, driven by voter dissatisfaction with rising prices and Trump’s record-low approval ratings. Recent archive coverage highlights a 'turnout crisis' among Republicans and a strategic distancing by GOP candidates, such as Florida’s Byron Donalds, from the president’s brand. While the economy appears resilient in aggregate data, the political backlash suggests that macroeconomic stability is not sufficient to counteract voter frustration with cost-of-living issues.

Why it matters

The disconnect between robust small business metrics and low presidential approval ratings highlights a critical challenge for the Republican Party in the November midterms. While small businesses employ half the workforce and generate half the GDP, their optimism is tempered by inflation and labor market tightness. If this economic resilience fails to translate into voter support, it underscores that political outcomes may be driven more by perceived cost-of-living pressures than by aggregate business performance, potentially securing a Democratic majority in Congress.

What to watch

Analysts will closely watch whether the stability in small business hiring and revenue growth can influence voter sentiment in the final weeks before the November midterms. Key indicators include whether inflation concerns continue to dominate small business surveys and if the mixed employment data from firms like Intuit and ADP shifts the narrative on economic health. Additionally, the performance of swing-state economies, such as Philadelphia, will be scrutinized to see if local business resilience can counteract broader national dissatisfaction with the administration.