Global| Apr 11 2006Small Business Optimism Drooped
by:Tom Moeller
|in:Economy in Brief
Summary
Small business optimism fell 3.4% during March following three consecutive months of sideways movement, according to the National Federation of Independent Business (NFIB). The index drooped last month to its lowest level in three [...]
Small business optimism fell 3.4% during March following three consecutive months of sideways movement, according to the National Federation of Independent Business (NFIB). The index drooped last month to its lowest level in three years.
During the last ten years there has been a 70% correlation between the level of the NFIB index and the two quarter change in real GDP.
Expectations that the economy would improve fell to the worst level in five years. The percentage of firms with one or more job openings also reversed recent months' gains and the percentage of firms planning to increase employment fell to the lowest since early 2003.
The percent planning to raise capital expenditures fell sharply..The percentage of firms planning to raise average selling prices slipped to 26% while the percentage of firms actually raising prices fell hard to 17%. During the last ten years there has been a 60% correlation between the change in the producer price index and the level of the NFIB price index.
About 24 million businesses exist in the United States. Small business creates 80% of all new jobs in America.
| Nat'l Federation of Independent Business | Mar | Feb | Y/Y | 2005 | 2004 | 2003 |
|---|---|---|---|---|---|---|
| Small Business Optimism Index (1986=100) | 98.0 | 101.5 | -4.4% | 101.6 | 104.6 | 101.3 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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