Global| Dec 09 2014U.S. Small Business Optimism Jumps to New High
by:Tom Moeller
|in:Economy in Brief
Summary
The National Federation of Independent Business reported that its Small Business Optimism Index for November improved to 98.1 following an unrevised gain to 96.1 during October. The latest level was the highest since February 2007. [...]
The National Federation of Independent Business reported that its Small Business Optimism Index for November improved to 98.1 following an unrevised gain to 96.1 during October. The latest level was the highest since February 2007.
Improvement in the component series versus October included the percentage of firms expecting higher real sales. The percentage planning to increase employment rose to its highest level since July but the percentage indicating few or no qualified applicants for job positions remained near its cycle high.
The percentage of companies indicated that now was a good time to expand the business held near its recovery peak. The percentage indicating that credit was harder to get ticked up m/m but remained near the lowest level since 2006. The percentage planning to add to inventories slipped versus its recent high as did the percentage planning capital expenditures.
On the pricing front, the percentage of firms raising prices returned to the lowest level in nine months. The percentage planning price increases ticked lower. Labor's pricing power firmed somewhat. The percentage of firms raising worker compensation gained to its highest point in three months. The percentage planning to raise compensation returned to its highest since March 2008.
The most important problems faced by small business were taxes (23%), government requirements (22%), poor sales (12%), quality of labor (10%), competition from large businesses (8%), insurance cost & availability (7%), cost of labor (5%), inflation (3%) and financial & interest rates (3%).
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 | Nov | Oct | Sep | Nov'13 | 2013 | 2012 | 2011 |
|---|---|---|---|---|---|---|---|
| Small Business Optimism Index (SA, 1986=100) | 98.1 | 96.1 | 95.3 | 92.5 | 92.4 | 92.2 | 91.4 |
| Firms Expecting Higher Real Sales In Six Months (SA, Net %) | 14 | 9 | 5 | 3 | 4 | 2 | 3 |
| Firms Expecting Economy To Improve (SA, Net %) | 13 | -3 | -2 | -20 | -15 | -9 | -9 |
| Firms Planning to Increase Employment (SA, Net %) | 11 | 10 | 9 | 9 | 6 | 4 | 3 |
| Firms With Few or No Qualified Applicants For Job Openings (SA, %) | 45 | 45 | 42 | 44 | 39 | 35 | 32 |
| Firms Reporting That Credit Was Harder To Get (SA, Net %) | 5 | 4 | 7 | 6 | 6 | 8 | 10 |
| Firms Raising Average Selling Prices (SA, Net %) | 4 | 8 | 4 | 2 | 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.
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