Small business owners' approval of President Biden drops to a new low, according to a CNBC survey.

• The approval rating of President Joe Biden among small business owners reaches a record low in the latest CNBC/SurveyMonkey Small Business Survey.
• The fourth quarter sees a slight rebound in small business confidence, reaching its highest level during the Biden presidency, with significant differences in views on the economy among Republicans and Democrats.
• Despite significant GDP growth, a strong jobs market, and recent inflation data falling to multi-year lows, the president's "Bidenomics" message continues to struggle to resonate with Independents, who remain closer to Republicans in their outlook.

One of the early challenges for President Joe Biden's reelection campaign is the disconnect between actual economic progress and the outlook of Americans, including small business owners on Main Streets across the nation.

According to the CNBC/SurveyMonkey Small Business Survey, President Biden's approval among small business owners has decreased to 30%, a 13% drop from his first quarter of 2021 approval rating of 43%. The majority of business owners who disapprove of the president's handling of the presidency (56%) significantly outweigh those who approve (13%).

According to a recent survey of over 2,000 small business owners conducted by SurveyMonkey for CNBC between November 16-21, new lows in approval for President Biden have been observed, as well as a potential edge for former president Donald Trump in hypothetical election rematch scenarios in battleground states.

Nearly 60% of registered voters disapprove of Biden's handling of the economy, according to a recent NBC News poll. Treasury Secretary Janet Yellen discussed the reality behind the negative economic outlook on CNBC, citing high food and rent prices that have been dropping from peak inflation. "I think we're making considerable progress in bringing inflation down," she said on "Squawk Box" on Monday.

The political views of small business owners are heavily influenced by partisanship, with a significant conservative bias. Only 7% of Republicans have a positive view of Biden, compared to 85% of Democrats. The impact of partisanship is evident in the immediate issues, such as the holiday sales outlook, with 37% of GOP business owners expecting a worse sales season than last year, versus 15% of Democrats.

A mixed Biden endorsement among Democrats

The Biden endorsement among Democrats is divided, with only a slight majority (44%) strongly approving of his presidency, compared to 42% who somewhat approve. Among Democrats who own businesses, 48% describe the economy as good, but 40% say it is fair or poor. Additionally, Democrats are less likely (69%) to believe their party will help small business owners more than Republicans (86%).

Small business voters tend to lean towards Republicans, with only 26% approving of Biden and 48% strongly disapproving, while only 5% strongly approve. Biden has an opportunity to improve his standing among independent business owners, as only 13% have already decided on a candidate and nearly half (45%) have no preference.

Business confidence edges up with sales, hiring outlook stable

Despite a negative view of Biden, small business confidence has rebounded to its highest level during his presidency in Q4, reaching 46, up from the all-time low of 42 in Q3. Additionally, confidence among Biden supporters also increased, while small business confidence among those who disapprove of Biden reached an all-time high at 40 in Q4. Across all political leanings, small business owners are more likely to rate the current conditions for their business as "good" or at least "middling" as opposed to "bad."

The sales and job outlook among business owners is generally positive, with only a small percentage of Republicans and independents describing the economy as bad. However, a similar number of small business owners across political affiliations expect revenue and staffing levels to decrease over the next 12 months, and they are more likely to predict a stable outlook for both sales and hiring.

Inflation, interest rates continue to influence Main Street views

Small businesses are facing challenges due to inflation and interest rates, which are the primary reasons for Biden's struggles to gain more support from the community, according to a survey. After the Federal Reserve raised interest rates aggressively, many small businesses are facing high-interest loans, making it difficult for them to access credit in a tight banking environment.

Despite the Fed's efforts to control inflation, small businesses are hesitant to believe that prices will decrease, as they are less likely to benefit from a drop in input costs. Consumers, on the other hand, are becoming more confident in their ability to reignite inflation, even as prices fall.

Despite recent reports showing both consumer and wholesale prices at multi-year lows, a majority of small business owners believe inflation has not yet reached its peak. In fact, 70% of these owners predict that prices will continue to rise, with 43% of Democrats sharing this view.

Over half of Democrats and 70% of small business owners report rising costs of supplies, while 42% say wages are still increasing.

In the past three months, 66% of Republican business owners and 62% of Democratic business owners have raised wages to attract workers.