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Economy in Brief
Italian Consumer Confidence Remains Hammered Down
Italy's consumer confidence fell month-to-month...
U.S. Current Account Deficit Deepens to Record in Q1'22
The U.S. current account deficit deepened to $291.4 billion during Q1'22...
Kansas City Fed Manufacturing Index Declines Further in June But Remains Positive
The Kansas City Fed reported that its manufacturing sector business activity index fell to 12 in June...
U.S. Unemployment Claims Edged Down
Initial claims for unemployment insurance filed in the week ended June 18 declined by 2,000 to 229,000...
U.S. Energy Prices Reverse Earlier Gains
Retail gasoline prices surged to $5.01 per gallon (63.1% y/y)...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Sandy Batten October 12, 2021
• NFIB Optimism Index fell in September to lowest level since March.
• Three of the 10 index components rose, five declined and two were unchanged.
• Lack of qualified workers and supply-chain bottlenecks still major impediments.
The Small Business Optimism Index fell to 99.1 in September, the lowest reading since March, from 100.1 in August, according to the National Federation of Independent Business. Only three of the index's 10 components increased, five declined and two held steady. The NFIB Uncertainty Index rebounded to 74 in September after having fallen to 69 in August, the lowest level since January 2016.
The net balance of respondents expecting the economy to improve over the next six months dropped to -33% in September, the lowest level since December 2012, from -28% in August. This was the third consecutive monthly decline. Fifty-three percent reported making a capital outlay in the past six months, down 2%-points from August and historically a weak reading. Only 28% expect to make a capital outlay in the next three to six months.
Fifty-one percent of respondents reported job openings that could not be filled, the third consecutive 48-year record high. And a net 42% reported raising compensation, also a 48-year record high. A net 30% plan to raise compensation in the next three months, up 4%-points from August's record high reading. Twelve percent cited labor costs as their top business problem and 28% said that labor quality was their major problem. Both were record high readings.
Over 35% of respondents reported that supply-chain disruptions have had a significant impact on their business. Another 32% report a moderate impact and 21% report a mild impact. Only 10% of owners report no impact from recent supply-chain disruptions. A net 10% viewed current inventory stocks as "too low" in September, down 1%-point from August.
Inflation pressures remain elevated although the net percent of respondents raising average selling prices decreased 3%-points to a net 46% (seasonally adjusted). Unadjusted, 8% reported lower average selling prices and 53% reported higher average prices. Price hikes were the most frequent in wholesale (75% higher, 0% lower), manufacturing (67% higher, 4% lower), and retail (71% higher, 2% lower). Seasonally adjusted, a net 46% plan price hikes, the highest reading since the early 1980s.
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) | Sep | Aug | Jul | Sep '20 | 2020 | 2019 | 2018 |
---|---|---|---|---|---|---|---|
Small Business Optimism Index (1986=100) | 99.1 | 100.1 | 99.7 | 104.0 | 99.6 | 103.0 | 106.7 |
Firms Expecting Economy to Improve | -33 | -28 | -20 | 32 | 20 | 13 | 32 |
Firms Expecting Higher Real Sales | 2 | -2 | -4 | 8 | 1 | 18 | 26 |
Firms Reporting Now Is a Good Time to Expand the Business | 11 | 11 | 13 | 13 | 13 | 25 | 30 |
Firms Planning to Increase Employment | 26 | 32 | 27 | 23 | 16 | 19 | 21 |
Firms With Few or No Qualified Applicants for Job Openings (%) | 62 | 60 | 57 | 50 | 46 | 52 | 51 |
Earnings Trends | -14 | -15 | -13 | -12 | -16 | -5 | -2 |
Firms Reporting that Credit Was Harder to Get | 4 | 3 | 2 | 2 | 3 | 4 | 4 |
Firms Raising Average Selling Prices | 46 | 49 | 46 | 13 | 5 | 13 | 15 |
Firms Raising Worker Compensation | 42 | 41 | 38 | 23 | 23 | 31 | 33 |