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Economy in Brief

U.S. Small Business Optimism Remains Subdued
by Tom Moeller  May 10, 2011

The National Federation of Independent Business indicated that its index of small business optimism slipped to 91.2 in April from an unrevised 91.9 in March. The latest was the lowest level since September. Deterioration amongst the sub-series was widespread. The percentage of firms expecting the economy to improve remained negative, falling to its lowest since September. Firms expecting higher real sales in six months was at its lowest since October.

The percentage of firms with job openings now remained near its recent high. However, the percentage of firms planning to add jobs remained near its lowest since October. The percentage with few or no qualified job applicants for job openings rose close to its highest since late-2008.

The credit crunch seems to have passed as firms indicating that credit was harder to get remained near its lowest since June 2008. However, businesses planning capital expenditures during the next six months reversed course and fell to its lowest percentage since November. The percentage of firms planning, and currently, raising prices remained strong near the highest levels since late-2008.

The most important problems faced by small business were poor sales (25%), taxes (19%), government requirements (17%), inflation (8%), insurance cost & availability (8%), competition from large businesses (7%), quality of labor (4%) and financial & interest rates (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.

Nat'l Federation of Independent Business Apr Mar Feb Apr
2010 2009 2008
Small Business Optimism Index (SA,1986=100) 91.2 91.9 94.5 90.6 89.9 86.7 89.8
  Firms Expecting Higher Real Sales In Six Months (Net %) 5 6 14 6 1 -11 -7
  Firms Expecting Economy To Improve (Net %) -8 -5 9 0 -1 -0 -10
  Firms With One or More Job Openings (Net %) 14 15 15 11 10 9 18
  Firms Reporting That Credit Was Harder To Get (Net %) 9 8 11 14 13 14 9
  Firms Raising Avg. Selling Prices (Net %) 12 9 5 -11 -12 -20 17
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