Global| May 13 2014U.S. Small Business Optimism Jumps to Highest Level Since 2007
by:Tom Moeller
|in:Economy in Brief
Summary
Small business sentiment is emerging from the winter doldrums. The National Federation of Independent Business reported that its Small Business Optimism Index jumped to 95.2 during April after its increase to 93.4 in March. The latest [...]
Small business sentiment is emerging from the winter doldrums. The National Federation of Independent Business reported that its Small Business Optimism Index jumped to 95.2 during April after its increase to 93.4 in March. The latest level was its highest since October 2007, just before the recession set in.
The gain reflected a jump in the index covering those who expected economic improvement, bringing it to its highest level since August. The percentage of firms indicating that credit was harder to get plunged to its lowest level since September and continued the downward trend in place since 2009. A surge in the percent looking to add to inventories equaled the highest level since 2007. The percentage of firms with positions they were unable to fill also was at the highest point since 2007 and the percent looking to raise employment recovered some of its March decline. Credit conditions were expected to ease by more firms and higher real earnings were projected by the most in two years.
A sharply higher 12% of firms raised average selling prices and a firm 22% of firms planned to raise them in the future. A stable 14% planned to increase worker compensation, the most of the economic recovery.
The most important problems faced by small business were taxes (22%), government requirements (20%), poor sales (15%), quality of labor (9%), competition from large businesses (9%), insurance cost & availability (7%), cost of labor (5%), inflation (5%) and financial & interest rates (1%).
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.
| National Federation of Independent Business | Apr | Mar | Feb | Apr'13 | 2013 | 2012 | 2011 |
|---|---|---|---|---|---|---|---|
| Small Business Optimism Index (SA, 1986=100) | 95.2 | 93.4 | 91.4 | 92.1 | 92.4 | 92.2 | 91.4 |
| Firms Expecting Higher Real Sales In Six Months (Net %) | 10 | 12 | 3 | 4 | 4 | 2 | 3 |
| Firms Expecting Economy To Improve (Net %) | -9 | -18 | -19 | -15 | -15 | -9 | -9 |
| Firms Planning to Increase Employment (Net %) | 8 | 5 | 7 | 6 | 6 | 4 | 3 |
| Firms With Few or No Qualified Applicants For Job Openings (Net %) | 41 | 41 | 40 | 38 | 39 | 35 | 32 |
| Firms Reporting That Credit Was Harder To Get (Net %) | 5 | 8 | 8 | 7 | 6 | 8 | 10 |
| Firms Raising Average Selling Prices (Net %) | 12 | 9 | 1 | 3 | 2 | 4 | 5 |
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.
