Small-business optimism reached the best level of the year in October, though the presidential race has increased small-business uncertainty to a 42-year high.

The National Federation of Independent Business's small-business optimism index increased to 94.9 last month, marking a new high for the year, and up from 94.1 in September. Still, the gauge remains below the its historical average of 98.

The reading beat expectations; economists surveyed by The Wall Street Journal expected 94.0.

The organization said the fourth quarter looks to be weaker with the uncertainty index hitting a 42 year high, in light of the political climate and election day on Tuesday.

The trade group's survey, based on about 1,700 respondents in July, is a monthly snapshot of America's small-business sector. The smallest U.S. businesses are home to most American jobs and account for roughly half of economic output. Many economists look to the report for clues on hiring, wage and business investment trends in the broader economy, and for a read on domestic demand.

In October, five of the report's 10 subindexes rose, three declined and two were unchanged.

Many small-business owners have struggled to fill open positions, a sign that the economy is nearing full employment.

Write to Austen Hufford at austen.hufford@wsj.com

(END) Dow Jones Newswires

November 08, 2016 13:05 ET (18:05 GMT)

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