Recent Updates
- US: Wholesale Trade (Feb), Producer Prices (Mar)
- US: Producer Price Indexes by Commodity Detail (Mar)
- US: Producer Price Indexes by Industry Detail (Mar)
- Canada: Investment in Building Construction (Feb), Labor Force Survey (Mar)
- more updates...
Economy in Brief
U.S. Wholesale Inventories Post Strong February Gain; Sales Fall
Wholesale inventories increased 0.6% (2.0% y/y) during February...
U.S. Initial Unemployment Insurance Claims Unexpectedly Increase
Initial claims for unemployment insurance rose to 744,000 during the week ended April 3...
Total PMIs Gain Traction in March
The PMI readings for March show improvement again...
U.S. Consumer Credit Outstanding Bounces Back in February
Consumer credit outstanding surged $27.6 billion during February...
U.S. Trade Deficit Widens to Record during February
The U.S. trade deficit in goods and services widened to $71.1 during February...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Tom Moeller November 12, 2019
The National Federation of Independent Business (NFIB) reported that its Small Business Optimism Index rose 0.6% (-4.7% y/y) to 102.4 during October and recovered half of the September decline. The index remained near its recent low, down 5.9% from the expansion high last August.
A slightly improved 10% of respondents expected the economy to improve. That was down from a high of 48% in January 2017. An increased 17% of firms expected higher real sales, significantly below the November 2017 high of 34%. A slightly higher 23% thought that now was a good time to expand the business versus the recent high of 34% in August 2018. An increased 29% of firms expected to make capital outlays versus a high of 33% last August.
Just 10% of firms were raising average selling prices versus the May 2018 high of 19%. Expected pricing power improved modestly. Twenty percent of firms were planning to raise prices, up from 15% in September.
Labor market readings improved slightly last month. The 18% of respondents planning to increase employment was up m/m but remained below the record 26% reached last August. The ability to find qualified workers became slightly harder. An increased 53% of firms were finding few or no qualified candidates for job openings.
A slightly higher 30% of firms were currently raising worker compensation. That remained down from the 36% high this past January. An increased 22% of firms planned to raise worker pay, the most since May.
Credit remained easy to get. Only four percent of firms reported trouble obtaining financing. Sixteen percent of firms reported difficulty near the end of the recession in 2009. Just three percent of firms were not satisfied that their borrowing needs were met in the last three months.
The small business survey inquires about additional issues facing small business. A still high 25% reported a problem with the quality of labor and a lessened 15% indicated that taxes were the largest problem. Government requirements were worrisome by a slightly higher 13% of respondents, but that remained below the September 2013 high of 24%. A near-record 10% of firms reported the cost of labor as the most significant problem. Competition from large businesses was felt by a steady 10% of businesses as the biggest problem. Insurance costs/availability concerned a stable nine percent of respondents. Poor sales were the biggest problem for a lessened eight percent of businesses, down from 32% in 2009. Financial & interest rate problems worried a lessened one percent of respondents. Inflation concerned only two percent of respondents as the biggest problem, near the expansion low.
Roughly 24 million small businesses exist in the U.S. and they create 80% of all new jobs. The index is based 1986=100. The typical NFIB member employs 10 people and reports gross sales of about $500,000 a year.
The NFIB figures can be found in Haver's SURVEYS database.
Monetary Policy, Price Stability, and Equilibrium Bond Yields: Success and Consequences is the title of today's speech by Fed Vice Chair Richard H. Clarida. It is available here.
National Federation of Independent Business (SA, Net % of Firms) | Oct | Sep | Aug | Oct'18 | 2018 | 2017 | 2016 |
---|---|---|---|---|---|---|---|
Small Business Optimism Index (1986=100) | 102.4 | 101.8 | 103.1 | 107.4 | 106.7 | 104.9 | 95.3 |
Firms Expecting Economy to Improve | 10 | 9 | 12 | 33 | 32 | 39 | -5 |
Firms Expecting Higher Real Sales | 17 | 16 | 17 | 28 | 26 | 23 | 5 |
Firms Reporting Now Is a Good Time to Expand the Business | 23 | 22 | 26 | 30 | 30 | 23 | 10 |
Firms Planning to Increase Employment | 18 | 17 | 20 | 20 | 21 | 18 | 11 |
Firms With Few or No Qualified Applicants for Job Openings (%) | 53 | 50 | 57 | 53 | 51 | 49 | 46 |
Firms Expecting to Make Capital Outlays | 29 | 27 | 28 | 30 | 29 | 28 | 26 |
Firms Reporting That Credit Was Harder to Get | 4 | 4 | 1 | 4 | 4 | 4 | 5 |
Firms Raising Average Selling Prices | 10 | 8 | 11 | 16 | 15 | 7 | 0 |
Firms Raising Worker Compensation | 30 | 29 | 29 | 34 | 33 | 27 | 24 |