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Economy in Brief

U.S. Small Business Optimism Is Stable At Recent High
by Tom Moeller  February 14, 2012

Small business optimism appears intact. The National Federation of Independent Business indicted that its January index of small business optimism was 93.9 versus 93.8 in December. These figures are the highest since last February. The percentage of firms indicating that now is a good time to expand the business slipped m/m but remained at its recovery high. The job openings reading was the highest since June 2008, although the percentage of firms planning to increase employment slipped. Those reporting difficulty finding qualified candidates fell and reversed an earlier uptrend. Though the percentage of firms feeling that now is a good time to expand the business slipped m/m it was near its highest since October 2010. Fewer firms were raising prices but the percentage of firms planning to raise prices rose to its highest level since August.

The most important problems faced by small business were poor sales (by a greatly lessened 22%), government requirements (19%, the highest since 1996), taxes (18%), insurance cost & availability (9%), competition from large businesses (8%), inflation (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 Jan Dec Nov Jan'11 2011 2010 2009
Small Business Optimism Index (SA,1986=100) 93.9 93.8 92.0 94.1 91.4 89.9 86.7
Firms Expecting Higher Real Sales In Six Months (Net %) 10 9 4 13 3 1 -11
Firms Expecting Economy To Improve (Net %) -3 -8 -12 10 -9 -1 -0
Firms With One or More Job Openings (Net %) 18 15 16 13 14 10 9
Firms With Few or No Qualified Applicant For Job Openings (Net %) 31 34 35 28 32 27 --
Firms Reporting That Credit Was Harder To Get (Net %) 8 8 10 10 10 13 14
Firms Raising Avg. Selling Prices (Net %) -1 0 0 -4 5 -12 -20
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