U.S. NFIB Small Business Optimism Index Strengthens in April

• Optimism rebounds to highest level since November.

• Improved optimism is widespread amongst survey categories.

• Pricing power improves greatly.

The National Federation of Independent Business (NFIB) reported that its Small Business Optimism Index rose sharply to 99.8 during April from 98.2 during March. The NFIB release indicated that "Finding qualified employees remains the biggest challenge for small businesses and is slowing economic growth."

A minimally improved net 1% of respondents are expecting higher real sales. A net 14% felt that now was a good time to expand the business, the most since February of last year. A greatly strengthened net 27% were planning to make capital expenditures. Earnings trends improved over the past three months.

A lessened -14% were expecting the economy to improve while a slightly lessened net 21% of firms planned to increase employment. A higher 54% were finding few or no qualified candidates to fill job openings, up from 37% in May 2019. It was the highest percentage since August 2019.

Credit was hard to get by an increased three percent of respondents, the most since December.

Pricing power surged with a net 31% of firms raising prices in April, the most in twenty years. A net 31% of firms raised worker compensation in April, up from 15% last spring and the most since March of last year.

Important issues for small businesses were lessened quality of labor (24%), taxes (19%), government requirements (13%) and rising labor costs (9%).

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.