Global| Oct 12 2010Small Business Optimism Moves Further Sideways
by:Tom Moeller
|in:Economy in Brief
Summary
Small businesses see little to improve their sense of well being about the U.S. economy. The National Federation of Independent Business indicated that their index of small business optimism inched up to 89.0 last month from 88.8 in [...]
Small businesses see little to improve their sense of well being about the U.S. economy. The National Federation of Independent Business indicated that their index of small business optimism inched up to 89.0 last month from 88.8 in August. The figure has moved sideways since June when it fall sharply from earlier in Q2.
The largest September deterioration was in the percent of firms planning to increase employment as it fell back to the level 12 months ago. In addition, the percent of firms with one or more job opening now held steady at its recent high. The deterioration was prompted by a lessened percentage of firms expecting higher sales in six months while the percent expecting to make a capital expenditure in the next six months fell to the cycle low.
Fewer firms were planning to raise prices and the percentage fell to its lowest this year. The percentage lifting prices now also reversed its gain during August. In tandem, plans to raise worker compensation fell to the lowest level since January.
Moving upward was the percentage of firms planning to raise inventories. The figure rose to its highest since late 2008. Also moving slightly higher m/m was the percentage of firms raising capital expenditures. Finally, credit was seen as harder to get by the highest percentage since April. Poor sales were scene as the largest problem facing small business followed by taxes and government requirements.
Roughly 24 million small businesses exist in the U.S. and they create 80% of all new jobs. The NFIB figures can be found in Haver's SURVEYS database.
The Seven Faces of "The Peril" from the Federal Reserve Bank of St. Louis is available here.
| Nat'l Federation of Independent Business | September | August | July | Sept. '09 | 2009 | 2008 | 2007 |
|---|---|---|---|---|---|---|---|
| Small Business Optimism Index (SA, 1986=100) | 89.0 | 88.8 | 88.1 | 88.8 | 86.7 | 89.8 | 96.7 |
| Firms Expecting Economy To Improve (Net %) | -3 | -8 | -15 | 8 | -0 | -10 | -4 |
| Firms With One or More Job Openings (Net %) | 11 | 11 | 10 | 8 | 9 | 18 | 24 |
| Firms Reporting That Credit Was Harder To Get (Net %) | 14 | 12 | 13 | 14 | 14 | 9 | 6 |
| Firms Raising Avg. Selling Prices (Net %) | -11 | -8 | -11 | -21 | -20 | 17 | 15 |
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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