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Economy in Brief

U.S. Small Business Optimism Reaches Nine-Month High
by Tom Moeller  December 13, 2011

Small businesses are feeling better about the economy. The National Federation of Independent Business indicated that its November index of small business optimism rose to 92.0 from an unrevised 90.2 in October. The job openings reading was the highest of the economic recovery as was the percentage of firms planning to increase employment. Improvement in firms' expectations for higher sales rose to its highest since April and the reading for the economy was its best since June. Also, the percentage of firms feeling that now is a good time to expand the business was its highest since January while those feeling that credit was harder to get slipped to just 10%. No firms, on balance, were raising prices, its lowest level since January. The percentage of firms planning to raise prices was a low 15%.

The most important problems faced by small business were poor sales (25%), government requirements (19%), taxes (19%), inflation (6%), insurance cost & availability (8%), competition from large businesses (7%), quality of labor (5%), financial & interest rates (3%) 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 Nov Oct Sep Nov'10 2010 2009 2008
Small Business Optimism Index (SA,1986=100) 92.0 90.2 88.9 93.2 89.9 86.7 89.8
Firms Expecting Higher Real Sales In Six Months (Net %) 4 -4 -6 6 1 -11 -7
Firms Expecting Economy To Improve (Net %) -12 -16 -22 16 -1 -0 -10
Firms With One or More Job Openings (Net %) 16 14 14 9 10 9 18
Firms Reporting That Credit Was Harder To Get (Net %) 10 11 10 11 13 14 9
Firms Raising Avg. Selling Prices (Net %) 0 -1 6 -4 -12 -20 17
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