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Economy in Brief

U.S. Small Business Optimism Declines Sharply
by Tom Moeller  July 10, 2012

The National Federation of Independent Business reported that its Small Business Optimism Index fell sharply during June to 91.4 from an unrevised 94.4 in May. The latest level was the lowest since October. The percentage of firms expecting the economy to improve fell to -10%, its lowest since November. The percentage of firms with one or more job openings fell back to 15%, its least since October. Those planning to raise employment declined to 3%. The percentage finding few or no qualified job applicants fell back to 33%, its least in three months.

The percentage of firms reporting that credit was harder to get fell to 7% and remained well below the early-2009 high of 16%. The percentage planning to raise worker compensation fell to a lower 7%, its least since January. The percentage of firms lifting prices held at 3% while just 16% were planning to raise prices, the least since December.

The most important problems faced by small business were poor sales (23%), taxes (21%), government requirements (19%), insurance cost & availability (8%), inflation (6%), quality of labor (6%), competition from large businesses (6%), financial & interest rate (3%) and the cost of labor (2%).

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 Jun May Apr Jun
2011
2011 2010 2009
Small Business Optimism Index (SA,1986=100) 91.4 94.4 94.5 90.8 91.4 89.9 86.7
Firms Expecting Higher Real Sales In Six Months (Net %) -3 2 6 0 3 1 -11
Firms Expecting Economy To Improve (Net %) -10 -2 -5 -11 -9 -1 -0
Firms With One or More Job Openings (Net %) 15 20 17 15 14 10 9
Firms With Few or No Qualified Applicant For Job Openings (Net %) 33 37 34 33 32 27 --
Firms Reporting That Credit Was Harder To Get (Net %) 7 9 7 9 10 13 14
Firms Raising Avg. Selling Prices (Net %) 3 3 8 10 5 -12 -20
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