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Economy in Brief

U.S. Small Business Optimism Nears Recovery High
by Tom Moeller  March 13, 2012

The National Federation of Independent Business indicated that its February index of small business optimism was 94.3 versus 93.9 in January. The latest was the highest in a year and the best since December 2007. The percentage of firms expecting higher real sales in six months rose to its highest in a year though those indicating that now is a good time to expand the business slipped from its recent high. Offsetting these improvements was a third consecutive decline in the percent of firms planning to raise employment. The percentage of firms raising average selling prices remained near zero but those planning to raise prices has been rising.

The most important problems faced by small business were poor sales (by a greatly lessened 22%), government requirements (21%, the highest since 1996), taxes (21%), inflation (a rising 9%), insurance cost & availability (7%), competition from large businesses (5%), quality of labor (5%), financial & interest rates (4%) and the cost of labor (3%).

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 Feb Jan Dec Feb'11 2011 2010 2009
Small Business Optimism Index (SA,1986=100) 94.3 93.9 93.8 94.5 91.4 89.9 86.7
Firms Expecting Higher Real Sales In Six Months (Net %) 12 10 9 14 3 1 -11
Firms Expecting Economy To Improve (Net %) -6 -3 -8 9 -9 -1 -0
Firms With One or More Job Openings (Net %) 17 18 15 15 14 10 9
Firms With Few or No Qualified Applicant For Job Openings (Net %) 31 31 34 30 32 27 --
Firms Reporting That Credit Was Harder To Get (Net %) 8 8 8 11 10 13 14
Firms Raising Avg. Selling Prices (Net %) 1 -1 0 5 5 -12 -20
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