Global| Feb 08 2011U.S. Small Business Optimism Highest Since 2007
by:Tom Moeller
|in:Economy in Brief
Summary
Small business confidence is on the mend. The National Federation of Independent Business indicated that their index of small business optimism rose to 94.1 in January from 92.6 in December. The latest was the highest level since [...]
Small business confidence is on the mend. The National Federation of Independent Business indicated that their index of small business optimism rose to 94.1 in January from 92.6 in December. The latest was the highest level since December 2007. Sharp improvement was reported in the percentage of firms expecting higher real sales in six months to its highest since 2007. Also improving was the percent expecting the economy to improve and higher real earnings this quarter over last. The percent of firms reporting that now was a good time to expand their business held constant at an improved level.
The number of firms with a job opening now held at its highest since December 2008 but the percentage of firms planning to add jobs slipped. Also, the percent expecting to make a capital expenditure in the next six months increased to its highest since 2008. Finally, the percentage of firms planning to raise prices also rose to its highest since late-2008, while the percentage of firms currently raising prices also improved. In tandem, raising worker compensation was its highest since 2008.
The most important problems faced by small business were poor sales (reduced to 27%), taxes (19%), government requirements (17%), insurance cost and availability (8%), competition from large businesses (7%), inflation (5%), quality of labor (5%) and financial & interest rates (3%) .The percent with few or no qualified job applicants for job openings remained at 28% though that still was up from its 2009 low of 21% .
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 Big Impact of Small Business from the Federal Reserve Bank of Atlanta is available here.
| Nat'l Federation of Independent Business | Jan | Dec | Nov | Jan'10 | 2010 | 2009 | 2008 |
|---|---|---|---|---|---|---|---|
| Small Business Optimism Index (SA,1986=100) | 94.1 | 92.6 | 93.2 | 89.3 | 89.9 | 86.7 | 89.8 |
| Firms Expecting Higher Real Sales In Six Months (Net %) | 13 | 8 | 6 | 3 | 1 | -11 | -7 |
| Firms Expecting Economy To Improve (Net %) | 10 | 9 | 16 | 1 | -1 | -0 | -10 |
| Firms With One or More Job Openings (Net %) | 13 | 13 | 9 | 10 | 10 | 9 | 18 |
| Firms Reporting That Credit Was Harder To Get (Net %) | 10 | 12 | 11 | 14 | 13 | 14 | 9 |
| Firms Raising Avg. Selling Prices (Net %) | -4 | -5 | -4 | -18 | -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.
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