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Economy in Brief

Small Business Optimism Recovered
by Tom Moeller August 11, 2004

The Small Business Optimism Index published by the National Federation of Independent Business (NFIB) jumped 2.8% last month and the increase recovered all of the decline during the prior two months.

The percentage of firms expecting the economy to improve jumped to 37%, the highest level since January. The percent of firms planning to raise employment rose to 15%, also the highest percentage since January.

The percentage of firms raising average selling prices fell sharply to 20% from the record 29% in June.

During the last ten years there has been a 68% correlation between the level of the NFIB index and the two quarter % change in real GDP.

About 24 million businesses exist in the United States. Small business creates 80% of all new jobs in America.

Nat'l Federation of Independent Business July June Y/Y 2003 2002 2001
Small Business Optimism Index (1986=100) 105.9 103.0 5.3% 101.3 101.2 98.4
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