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Economy in Brief

U.S. Small Business Optimism Slips
by Tom Moeller  August 14, 2012

The National Federation of Independent Business reported that its Small Business Optimism Index slipped in July to 91.2 after an unrevised skid to 91.4 in June. The latest level remained the lowest since October. The percentage of firms expecting higher real sales in six months fell to its lowest since September but those expecting the economy to improve rose slightly. The percentage of firms with one or more job openings held at 15%, its least since October. Those planning to raise employment rose minimally to 5%. The percentage finding few or no qualified job applicants bounced up to 38%, its highest since June 2008 (no typo).

The percentage of firms reporting that credit was harder to get held at 7% and remained at the June 2008 low. The percentage planning to raise worker compensation ticked higher to 8%, still near its least since January. The percentage of firms lifting prices rose to 8% while just 17% were planning to raise prices, nearly the least since December.

The most important problems faced by small business were taxes (21%), government requirements (21%), poor sales (20%), quality of labor (7%), competition from large businesses (7%), insurance cost & availability (6%), inflation (6%), the cost of labor (4%) and financial & interest rate (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 Jul Jun May Jul'11 2011 2010 2009
Small Business Optimism Index (SA,1986=100) 91.2 91.4 94.4 89.9 91.4 89.9 86.7
Firms Expecting Higher Real Sales In Six Months (Net %) -4 -3 2 -2 3 1 -11
Firms Expecting Economy To Improve (Net %) -8 -10 -2 -15 -9 -1 -0
Firms With One or More Job Openings (Net %) 15 15 20 12 14 10 9
Firms With Few or No Qualified Applicant For Job Openings (Net %) 38 33 37 31 32 27 --
Firms Reporting That Credit Was Harder To Get (Net %) 7 7 9 10 10 13 14
Firms Raising Avg. Selling Prices (Net %) 8 3 3 7 5 -12 -20
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