Main Street’s confidence in the Trump economy is rising even among Democrats

It is often said that the economic reality of Main Street doesn’t match the mood of Wall Street, but now, small business owners are gaining confidence in the market after a rocky start to 2025.

After a significant decline in small business confidence in the second quarter in President Trump’s tariff policy declaration, nearly half (46%) of small business owners say the economy is “good” or “good” from 30% in the second quarter, according to the quarterly CNBC | Surveymonkey Small Business Survey.

Improved sentiment is spreading across the party’s boundaries, with 24% of Democrats describing the economy as good or good, up from 8% in the second quarter. There was a similar increase among Republican small business owners, with 67% taking a positive view of the economy, 15 points higher than last quarter.

CNBC | Surveymonkey Small Business Confidence Index moved from 51 to 56 in the last quarter. This was Trump’s lowest mark in the survey, besides the occurrence of his first term of office. The biggest move was among Democrats, among which sentiment improved from 33 in the last quarter to 41. Republicans had a quarterly steady quarter with 68 trust, with the 47-year-old independent close to the previous quarter (45).

“Small business owners identified as Democrats are reporting the biggest increase in sentiment,” said Sam Gutierrez, senior research scientist at Surveymonkey. “They are much more optimistic about business terms compared to the previous quarter. Optimism appears to be rising even among Republican business owners.

The survey audience is a representative sample of the US small business community, distorting the conservativeness in political identification. Online voting was conducted by Surveymonkey from July 7-10, 2025 in a national sample of 1,900 self-identified SME owners aged 18 and older.

The improved sentiment has led to higher approval of President Trump, increasing from 48% in the second quarter to 57%, with confidence in the handling of presidency work, but the partisan disparity is wide, with 90% of Republicans expressing their support and only 18% of Democrats.

Most basic measures of business trust have risen. 44% explained current business conditions as good as 36% in the last quarter. More than half (51%) of SMEs expect sales to increase over the next 12 months, up from 41% in the second quarter. 28% said they would see staffing increase over the next 12 months, up from 22% in the second quarter.

At the same time, the proportion of small business owners is increasing, especially among Z and millennial generations, hoping to use AI more and quickly find positive impacts on businesses, and as a result, reduce employment over time.

The financial fear has not completely disappeared. In fact, concerns about the recession and tariffs remain high among the majority of SME owners. But they’re down. The number of people who think the country is heading for a recession is now at 61%, down from 70% in the second quarter. A small number of small business owners say they are affected by tariffs or will fall from 66% in the second quarter to 59% in the future.

Small and medium-sized business owners now cite tariffs as the biggest risk, down from 17% in the second quarter of this year to 10%. Inflation remains the biggest concern among small business owners, citing rising prices and citing consumer demand (18%).

“Small business owners feel safer overall. We’ve seen a rise in business sentiment after a sharp decline in the last quarter as fears about the impact of tariffs subside,” Gutierrez said.

However, with low fear of trade policy trends, concerns about consumer demand for Main Street coincides with Wall Street’s concerns. Goldman Sachs, for example, hopes that the US economy will be significantly slower, particularly due to tariffs and inflation and impacts on consumer spending. “Even price increases at once are consumed by actual revenue when consumer spending trends already seem unstable,” Goldman’s chief economist Jan Hatzius wrote in a recent note to clients.

Research data is close to the first quarter location before he unveiled tariff policies that shook the market after Trump’s reelection and brought widespread uncertainty among businesses in April. Currently, government policy views are also moving in a positive direction.

In the last quarter, 44% of employers expected government regulations to have a negative impact on their businesses in the next 12 months. That has now dropped to 36%.

Trade policy views have also improved, with 40% of employers saying it has fallen from 51% last year.

And as President Trump passed his signature tax and spending bill, the percentage of small business owners who stated tax policy over the next year will fall negatively from 37% to 32%.

Even as the number of small business owners improves, customs policy support remains sharply divided along partisan boundaries. 81% of Republican respondents support Trump’s tariff policy, while 87% of Democrats oppose it. Small business owners who identified as independents are far closer to Democrats on the issue of tariffs, with 71% saying they are opposed.