Optimism in the U.S. small business sector surpassed market expectations in November, registering the sharpest increase since May 2018 as seven of the 10 survey indicators reported by the National Federation of Independent Business, or NFIB, advanced month over month.

The NFIB's small-business optimism index rose 2.3 points to 104.7 in November from 102.4 recorded in the prior month. The consensus estimate of economists polled by Econoday was for a reading of 102.9 in November.

This follows a smashing November jobs report that tempered fears of a looming recession and snuffed out any expectations of another Federal Reserve interest rate cut at its meetings on Dec. 10 and 11.

The "historic run" is attributable to a "supportive" tax and regulatory environment, according to NFIB Chief Economist William Dunkelberg. "As the two-year anniversary of the Tax Cuts and Jobs Act's passage approaches this month, small businesses, the world's third largest economy, are using those savings to power the American economy," he said.

The monthly increase in small-business optimism was led by the index for earnings trends, which rose 10 points to a net 2% of survey respondents reporting quarter-over-quarter improvement in profits. The index is now 1 point short of the record set in May 2018.

The NFIB said the uncertainty index declined by 6 points to 72 in November, registering its lowest reading since May 2018.

Gains were recorded in the net percentages of business owners who said it was a good time to expand, as well as those expecting business conditions to improve, according to the NFIB.

On a seasonally adjusted basis, a net 12% of owners raised average selling prices, which were most frequently hiked in the retail trade and construction sectors.

The ongoing impeachment process against U.S. President Donald Trump "is proving to have little, if any, impact on small-business owners," the NFIB said, similar to that during the impeachment proceedings of former President Bill Clinton.