During September, small business optimism rose 1.0% from August after a 1.3% decline during that month. The level during September was 11% below the peak reached back in 2004, according to the National Federation of Independent Business (NFIB).

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 indicating that credit was more difficult to get rose to 9%, nearly double the recent low.

Financial Stability and the Federal Reserve is a speech delivered this weekend by Federal Reserve Board GovernorKevin Warsh and it is available here.

Internal Risk Models and the Estimation of Default Probabilities from the Federal Reserve Bank of San Francisco is available here.

Respondents expecting the economy improved slightly to 2% and the percentage with one or more job openings was stable at 25%. During the last ten years there has been a 71% correlation between the NFIB percentage and the y/y change in nonfarm payrolls.

The percent planning to raise capital expenditures remained at a reduced 29%, down from the 2005 average of 32%..The percentage of firms planning to raise average selling prices fell to 21%, the lowest level since late 2005. The percentage of firms actually raising prices also fell to 9%, nearly its lowest level since 2004. 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.