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 January 12, 2021
• NFIB Small Business Optimism falls to lowest level since May.
• Worries surge about economic growth & sales.
• Pricing power falls slightly.
The National Federation of Independent Business' (NFIB) reported that its Small Business Optimism Index declined sharply to 95.9 during December, down from the recent high of 104.0 and its record 108.8 in August 2018. During all of 2020, the Small Business Optimism Index fell to 99.6, its lowest point since 2016.
A greatly lessened net -16% of respondents felt that the economy would improve, down from 39% in June. A reduced net -4% expected higher real sales. Earnings trends also deteriorated sharply. A diminished net 8% of firms of firms thought that now was a good tine to expand, down from the August 2018 peak of 34%. A lessened net 17% of firms planned to increase employment, the least in six months. A greatly reduced net 22% of firms planned capital outlays in the next three to six months.
A slightly higher 48% of firms found few or no qualified candidates to fill job openings last month, but that remained down from 50% in December 2019.
Credit was hard to get by a low three percent of respondents, down from April's high of four percent.
Pricing power deteriorated. A lessened net 16% of firms raised prices, down from 18% in November, yet increased from 14% twelve months earlier. A slightly higher net 22% were planning last month to raise prices, the most since January. A lower net 21% of firms raised worker compensation, the least since August, while a greatly decreased 14% planned to do so over the next three months, down from 20% in November.
The most important issues for small businesses were lessened quality of labor (21%), taxes (21%), up from 17% twelve months earlier, and poor sales, steady at 13%. The cost of labor troubled a steady six percent of respondents while competition from large businesses troubled a lessened eight percent. Inflation troubled just two percent of respondents.
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) | Dec | Nov | Oct | Dec'19 | 2020 | 2019 | 2018 |
---|---|---|---|---|---|---|---|
Small Business Optimism Index (1986=100) | 95.9 | 101.4 | 104.0 | 102.7 | 99.6 | 103.0 | 106.7 |
Firms Expecting Economy to Improve | -16 | 8 | 27 | 16 | 20 | 13 | 32 |
Firms Expecting Higher Real Sales | -4 | 10 | 11 | 16 | 1 | 18 | 26 |
Firms Reporting Now Is a Good Time to Expand the Business | 8 | 12 | 13 | 25 | 13 | 25 | 30 |
Firms Planning to Increase Employment | 17 | 21 | 18 | 19 | 16 | 19 | 21 |
Firms With Few or No Qualified Applicants for Job Openings (%) | 48 | 47 | 48 | 50 | 46 | 52 | 51 |
Earnings Trends | -14 | -7 | -3 | -8 | -16 | -5 | -2 |
Firms Reporting that Credit Was Harder to Get | 3 | 2 | 3 | 3 | 3 | 4 | 4 |
Firms Raising Average Selling Prices | 16 | 18 | 15 | 14 | 5 | 13 | 15 |
Firms Raising Worker Compensation | 21 | 24 | 23 | 29 | 23 | 31 | 33 |