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Economy in Brief
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Globally Money Supply Slows or Contracts in Real Terms
Money supply trends show that slowing is widespread across the major monetary center countries...
U.S. Consumer Confidence Deteriorates Further in June
The Conference Board's Consumer Confidence Index weakened 4.4% (-23.4% y/y) in June...
U.S. FHFA House Prices Continued to Rise in April
The FHFA House Price Index increased 1.6% during April...
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The advance estimate of the U.S. international trade deficit in goods narrowed to $104.3 billion in May...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Tom Moeller November 10, 2020
• Stability in NFIB Small Business Optimism follows strong gains.
• Employment readings ease.
• Pricing gauges strengthen.
The National Federation of Independent Business' (NFIB) Small Business Optimism Index held steady at 104.0 during October. It remained the highest level since February, up from the April low of 90.9.
A lessened net 27% of respondents felt that the economy would improved, down from 39% in June. A diminished net 18% of firms of firms planned to raise employment, the least in three months. A lessened 48% of firms found few or no qualified candidates to fill job openings. To the upside, a net 11% of firms expected higher real sales, the most since June. A steady net 13% thought that now was a good time to expand the business, up from three percent in April. Earnings trends improved greatly as the readings so far this quarter have risen to -3 from -12, up from June's -35.
Credit was a bit harder to get by a still low three percent of respondents, down from April's high of four percent.
Pricing power improved again. An increased net 15% of firms raised prices, the strongest reading since January and up from 18% who lowered prices in April. A net higher 20% were planning to raise prices in October, the most since February. A steady net 23% of firms raised worker compensation while a higher 18% planned to do so over the next three months, up from seven percent six months ago.
The most important issues for small businesses were the quality of labor (22%), taxes (17%) and poor sales (13%). The cost of labor troubled a lessened eight percent of respondents while competition from large businesses troubled a steady nine percent.
Roughly 24 million small businesses exist in the U.S. and they create 80% of all new jobs. 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.
National Federation of Independent Business (SA, Net % of Firms) | Oct | Sep | Aug | Oct'19 | 2019 | 2018 | 2017 |
---|---|---|---|---|---|---|---|
Small Business Optimism Index (1986=100) | 104.0 | 104.0 | 100.2 | 102.4 | 103.0 | 106.7 | 104.9 |
Firms Expecting Economy to Improve | 27 | 32 | 24 | 10 | 13 | 32 | 39 |
Firms Expecting Higher Real Sales | 11 | 8 | 3 | 17 | 18 | 26 | 23 |
Firms Reporting Now Is a Good Time to Expand the Business | 13 | 13 | 12 | 23 | 25 | 30 | 23 |
Firms Planning to Increase Employment | 18 | 23 | 21 | 18 | 19 | 21 | 18 |
Firms With Few or No Qualified Applicants for Job Openings (%) | 48 | 50 | 46 | 53 | 52 | 51 | 49 |
Earnings Trends | -3 | -12 | -25 | -8 | -5 | -2 | -11 |
Firms Reporting that Credit Was Harder to Get | 3 | 2 | 1 | 4 | 4 | 4 | 4 |
Firms Raising Average Selling Prices | 15 | 13 | 1 | 10 | 13 | 15 | 7 |
Firms Raising Worker Compensation | 23 | 23 | 18 | 30 | 31 | 33 | 27 |