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Economy in Brief

U.S. Small Business Optimism Improves
by Tom Moeller  November 8, 2011

The National Federation of Independent Business indicated that its October index of small business optimism rose to 90.2 from an unrevised 88.9 in September. Improvement in firms' expectations for the economy and sales was accompanied by a stable jobs reading. Also, the percentage of firms making capital expenditures rose back to its highest level of the recovery. Moreover, the percentage of firms indicating that now is a good time to expand was its highest since February. The percentage of firms raising prices reversed course and fell to -1%, its lowest level since January. The percentage of firms planning to raise prices remained at 14%, its lowest since November.

The most important problems faced by small business were poor sales (26%), government requirements (19%), taxes (18%), inflation (6%), insurance cost & availability (7%), competition from large businesses (6%), quality of labor (6%), financial & interest rates (4%) and the cost of labor (4%).

Roughly 24 million small businesses exist in the U.S. and they create 80% of all new jobs. The NFIB figures can be found in Haver's SURVEYS database.

National Federation of Independent Business Oct Sep Aug Oct'10 2010 2009 2008
Small Business Optimism Index (SA,1986=100) 90.2 88.9 88.1 91.7 89.9 86.7 89.8
Firms Expecting Higher Real Sales In Six Months (Net %) -4 -6 -12 1 1 -11 -7
Firms Expecting Economy To Improve (Net %) -16 -22 -26 18 -1 -0 -10
Firms With One or More Job Openings (Net %) 14 14 15 10 10 9 18
Firms Reporting That Credit Was Harder To Get (Net %) 11 10 13 11 13 14 9
Firms Raising Avg. Selling Prices (Net %) -1 6 1 -5 -12 -20 17
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