Global| Sep 13 2011U.S. Small Business Optimism Continues Lower
by:Tom Moeller
|in:Economy in Brief
Summary
Small businesses increasingly see growth prospects dim. The National Federation of Independent Business indicated that its August index of small business optimism fell to 88.1 from an unrevised 89.9 in July. The latest was the lowest [...]
Small businesses increasingly see growth prospects dim. The National Federation of Independent Business indicated that its August index of small business optimism fell to 88.1 from an unrevised 89.9 in July. The latest was the lowest level since last July. Deterioration was notable for the percentage of firms expecting the economy to improve and for those expecting higher real sales in six months.
Despite deterioration in these measures of economic activity, the percentage of firms with job openings now rose to the high end of its recent range. Moreover, the percentage of firms planning to add jobs reversed its recent downtrend with a gain to the highest level since February. The percentage with few or no qualified job applicants for job openings rose m/m to 33%, its highest since late-2008.
Firms indicating that credit was harder to get jumped to its highest level since July of last year. The percent of firms borrowing at least once a quarter also matched its highest since last September. However, businesses planning capital expenditures during the next six months remained down sharply from the March high. The percentage of firms raising prices fell to 1%, its lowest since January. Moreover, the percentage planning to raise prices fell to 16%, its lowest this year.
The most important problems faced by small business were poor sales (25%), government requirements (19%), taxes (18%), insurance cost & availability (8%), inflation (6%), competition from large businesses (5%), quality of labor (4%), financial & interest rates (4%) and the cost of labor (3%).
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.
Helping Unemployed Borrowers Meet Their Mortgage Payments from the Federal Reserve Bank of New York can be found here.
| National Federation of Independent Business | Aug | Jul | Jun | Aug 10 |
2010 | 2009 | 2008 |
|---|---|---|---|---|---|---|---|
| Small Business Optimism Index (SA,1986=100) | 88.1 | 89.9 | 90.8 | 88.8 | 89.9 | 86.7 | 89.8 |
| Firms Expecting Higher Real Sales In Six Months (Net %) | -12 | -2 | 0 | 0 | 1 | -11 | -7 |
| Firms Expecting Economy To Improve (Net %) | -26 | -15 | -11 | -18 | -1 | -0 | -10 |
| Firms With One or More Job Openings (Net %) | 15 | 12 | 15 | 11 | 10 | 9 | 18 |
| Firms Reporting That Credit Was Harder To Get (Net %) | 13 | 10 | 9 | 12 | 13 | 14 | 9 |
| Firms Raising Avg. Selling Prices (Net %) | 1 | 7 | 10 | -8 | -12 | -20 | 17 |
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.
