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Economy in Brief
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U.K. retail sales and growth have all held up remarkably well- so far...
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The MBA total Mortgage Applications Index fell 7.1% (-23.3% y/y) in the week ending October 12...
by Tom Moeller December 13, 2005
The index of small business optimism from the National Federation of Independent Business (NFIB) fell 2.4% last month and reversed much of October's improvement.
The decline was due to fewer (11%) firms expecting the economy to improve. Plans for adding to employment fell to 13% from the high 17% of the last three months but the number of firms with job openings increased to the cycle's high of 24%. The percentage of firms planning to raise capital expenditures surged to 34%, the highest since March.
During the last ten years there has been a 70% correlation between the level of the NFIB index and the two quarter change in real GDP.
The percentage of firms planning to raise average selling prices rebounded to 33%, the highest level in over twenty years. The percentage of firms actually raising prices also rose. During the last ten years there has been a 60% correlation between the change in the producer price index and the level of the NFIB price index.
About 24 million businesses exist in the United States. Small business creates 80% of all new jobs in America.
The latest press release from the NFIB is available here.
| Nat'l Federation of Independent Business | Nov | Oct | Y/Y | 2004 | 2003 | 2002 |
|---|---|---|---|---|---|---|
| Small Business Optimism Index (1986=100) | 101.2 | 103.7 | -6.0% | 104.6 | 101.3 | 101.2 |
