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Economy in Brief
German PPI Rises at Nine-Month High Pace
The German PPI gained 0.2% in June on the heels of a 0.6% rise in May...
U.S. Leading Economic Indicators Improve
The Conference Board's Composite Index of Leading Economic Indicators increased 0.5% (5.8% y/y) during June...
Philadelphia Fed Factory Conditions Recover; Prices Surge
The Philadelphia Fed reported that its General Factory Sector Business Conditions Index rebounded to 25.7 during July...
U.S. Initial Unemployment Insurance Claims Hit Lowest Since 1969
Initial claims for unemployment insurance dropped to 207,000 during the week ended July 14...
Japan's Trade Deficit Swings Back to Surplus (Small Surplus)
Japan's early June trade results show a goods trade position having swung back to surplus in June from deficit in May...
by Tom Moeller August 11, 2005
The Small Business Optimism Index reported by the National Federation of Independent Business (NFIB) rose a slight 0.3% in July following no change the month prior.
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 slight rise reflected a reversal of the prior month's contradictory indications. In July a greater percentage of firms expected higher real sales in six months and a lower percentage expected the economy to improve.
The job outlook improved as the percentage of firms planning to raise employment recovered half of the prior month's decline an continued an up trend in place since April. The percentage of firms with one or more job openings also rose slightly. 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 fell as did the percentage of firms raising average selling prices rose.
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 | 2004 | 2003 | 2002 |
|---|---|---|---|---|---|---|
| Small Business Optimism Index (1986=100) | 101.1 | 100.8 | -4.5% | 104.6 | 101.3 | 101.2 |
