Global| Oct 10 2006Small Business Optimism Recovered, Pricing Pressures Eased
by:Tom Moeller
|in:Economy in Brief
Summary
In September, small business optimism more than recovered the prior month's decline. A 3.6% increase lifted the index to the highest level since April, according to the National Federation of Independent Business (NFIB). During the [...]
In September, small business optimism more than recovered the prior month's decline. A 3.6% increase lifted the index to the highest level since April, according to the National Federation of Independent Business (NFIB).
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.
Respondents expecting the economy to improve rose to the best level since February and the percentage planning to increase employment held at the highest level since February.
The percent of firms currently with one or more job openings held at 25%, about where it's been since May. During the last ten years there has been a 72% correlation between the NFIB percentage and the y/y change in nonfarm payrolls.
The percent planning to raise capital expenditures rose back to 30% recovering most of the prior month's decline..The percentage of firms planning to raise average selling prices fell sharply to 22%, the lowest level since early 2004. The percentage of firms actually raising prices also fell to 20%, its lowest level since March. 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.
Prospects for the U.S. Economy, yesterday's speech by Janet L. Yellen, President and CEO of the Federal Reserve Bank of San Francisco can be found here.
| Nat'l Federation of Independent Business | September | August | Y/Y | 2005 | 2004 | 2003 |
|---|---|---|---|---|---|---|
| Small Business Optimism Index (1986=100) | 99.4 | 95.9 | -0.6% | 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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