The unemployment rate in New Jersey is 7.3 percent, but that could be heading south in 2014.

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Small business owners are the most optimistic they have been in half a decade and they expect to hire more employees and increase cash flow in the next 12 months, according to the new Wells Fargo/Gallup Small Business Index.

"This quarterly index result that we see, this optimism is the highest level that we've seen in five years," said John Cole, Wells Fargo's Northeast business banking division manager. "Where there's optimism there's investment in the future, and where there's investment, part of that story is people and hiring."

More small business owners said they expect hiring to increase in the next 12 months than did during the last quarter, 22 to 16 percent. And while optimism in general is the highest it's been since the third quarter of 2008, the current level still doesn't match up to pre-recession numbers.

"We have to acknowledge that the economy back in 2008 took a pretty significant dive and we still are coming back up that curve," Cole said. "We're slowly, steadily making our way back. We see optimism rising significantly about cash flow, revenue growth, hiring growth."

There is a clear indicator of hiring growth according to Cole, who said Wells Fargo is taking on more bankers to meet the needs of optimistic business owners looking to expand.

"There are many reasons for small business owners to view 2014 as a promising year," said Lisa Stevens, Wells Fargo lead executive for small business. "There's less uncertainty in the economy than there has been for quite some time."

When business owners were asked to identify their most important challenges, their top overall concern was finding new business (21 percent). Other major problems included the economy (11 percent), government regulations (11 percent), health care (8 percent) and hiring (8 percent).