The NFIB index is depicted in the chart as being in the grip of a downtrend with a minor uptrend that remains trapped in a bear channel. It is still not close to breaking out of that channel on the upside but it is headed in that direction. At this point it is all speculation as to whether it will make it or not.

The responses to the broader NFIB survey are in the table below. They are for the most part still on the weak side as you would expect with an overall index that looks as this one does. Still, evidence on the overall US economy shows that conditions are getting better. So this improved performance could filter down and lift small business as well. But it could also be that weakness in small business is ‘the termites in the woodwork’ that will bring the big business strength down. Since much of hiring is in small businesses, the recent strength in jobs is encouraging even if not well reflected in the survey. For the moment it is a tug of war. These NFIB signals of course draw from this period of elevated energy prices and all firms are feeling that pinch. The revival of jobs growth after a period of persisting bad weather through the first four months of the year (as evidenced by work disruptions reported in the monthly jobs report) have now been set aside. In some sense we begin the process of assessing growth anew now with energy prices having moved up and the Fed no longer on a preconceived policy path and without a clear policy bias despite its stated relatively greater fear of inflation rising.

The NFIB survey shows rebounds in trends from March onward. Still the absolute readings are poor and are very low by historic standards; the response for "the economy is expected to improve" is in the bottom 11 percentile of its range since 2001. The one clear element lacking is that farms are unwilling to increase inventories. Capital spending plans are a touch weaker than they have been but still reside at a strong point relative to history (in the 90-plus percentile). Firms report fairly steady and moderate selling prices obtained and worker compensation costs paid. While firms are not planning to increase inventories, they report that inventories are rising. They report that credit has become relatively harder to get. Those reporting higher sales Q/Q are fewer in number but the number of positive responses is still historically at or above average depending on the period.