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Economy in Brief
U.S. Mortgage Loan Applications Continue to Decline As Interest Rates Rise
The MBA total Mortgage Applications Index fell 7.1% (-23.3% y/y) in the week ending October 12...
European Vehicle Registrations Plunge After Soaring
New car sales in the European Union in September plunged after registrations had ramped up ahead of the introduction of new emissions inspection rules...
U.S. Industrial Production Increases Moderately
The factory sector remains in good shape. Industrial production rose 0.3% (5.1% y/y) during September...
U.S. Home Builder Index Improves, but Remains Below Last Year's High
The Composite Housing Market Index from the NAHB-Wells Fargo inched up during October to 68 from an unrevised 67 in September...
U.S. JOLTS: Job Openings Rate Hits Another Record
The Bureau of Labor Statistics reported that the total job openings rate rose to a record 4.6% in August...
by Tom Moeller June 14, 2005
The Small Business Optimism Index reported by the National Federation of Independent Business (NFIB) improved 1.0% in May and recovered less than a third of the prior month's decline. The percentage of firms expecting the economy to improve remained unchanged at a low 5%.
During the last ten years there has been a 64% correlation between the level of the NFIB index and the two quarter change in real GDP.
The job outlook brightened a bit as the percentage of firms planning to raise employment rose to 15% but remained down from the 20% of December 2003. The percentage of firms with one or more job openings remained stable at 23% which was up from the low of 18% during 2003. During the last ten years there has been a 67% correlation between hiring plans and the three month growth in nonfarm payrolls.
The percentage of firms planning to raise capital spending ticked up to 33% but remained well off the 38% this past December.
The percentage of firms raising average selling prices remained down at 23%.
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 | May | April | Y/Y | 2004 | 2003 | 2002 |
|---|---|---|---|---|---|---|
| Small Business Optimism Index (1986=100) | 100.8 | 99.8 | -3.5% | 104.6 | 101.3 | 101.2 |
