Global| Jan 13 2005Small Business Optimism Slipped
by:Tom Moeller
|in:Economy in Brief
Summary
The Small Business Optimism Index published by the National Federation of Independent Business (NFIB) slipped 1.5% in December from the twenty year high to 106.1. During the last ten years there has been a 68% correlation between the [...]
The Small Business Optimism Index published by the National Federation of Independent Business (NFIB) slipped 1.5% in December from the twenty year high to 106.1.
During the last ten years there has been a 68% correlation between the level of the NFIB index and the two quarter change in real GDP.
The percentage of firms expecting the economy to improve fell ten points to 37 but the 4Q level was the highest of the year. The percent of firms planning to raise employment also fell to a still high 17%. During the last ten years there has been a 65% correlation between these hiring plans and the three month growth in nonfarm payrolls. The percentage of firms with one or more job openings rose back to 23%, the highest level since 2001. 
The percentage of firms expecting higher real sales in 6 months remained at an elevated 35%. The net of firms expecting higher earnings this quarter slipped.
The percentage of firms raising average selling prices fell to 15%, the lowest since February.
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 | Dec | Nov | Y/Y | 2004 | 2003 | 2002 |
|---|---|---|---|---|---|---|
| Small Business Optimism Index (1986=100) | 106.1 | 107.7 | -0.7% | 104.6 | 101.3 | 101.2 |
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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