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Economy in Brief

U.S. Small Business Optimism Remains Subdued
by Tom Moeller  June 14, 2011

The National Federation of Independent Business indicated that its index of small business optimism fell to 90.0 from an unrevised 91.2 in April. The latest remained the lowest level since September. Deterioration amongst the sub-series was widespread. The percentage of firms expecting the economy to improve remained negative while firms expecting higher real sales in six months fell to its lowest since October.

The percentage of firms with job openings now fell to its lowest level since November. However, the percentage of firms planning to add jobs turned negative for the first time since September. The percentage with few or no qualified job applicants for job openings slipped m/m but still was near its highest since late-2008.

Firms indicating that credit was harder to get rose m/m but remained near its lowest since June 2008. However, businesses planning capital expenditures during the next six months fell slightly to its lowest percentage since November. The percentage of firms raising prices remained strong near the highest level since October, 2008.

The most important problems faced by small business were poor sales (25%), taxes (20%), government requirements (15%), inflation (10%), insurance cost & availability (7%), competition from large businesses (7%), quality of labor (5%) 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 May Apr Mar May'10 2010 2009 2008
Small Business Optimism Index (SA,1986=100) 90.0 91.2 91.9 92.2 89.9 86.7 89.8
  Firms Expecting Higher Real Sales In Six Months (Net %) 3 5 6 5 1 -11 -7
  Firms Expecting Economy To Improve (Net %) -5 -8 -5 8 -1 -0 -10
  Firms With One or More Job Openings (Net %) 12 14 15 9 10 9 18
  Firms Reporting That Credit Was Harder To Get (Net %) 10 9 8 13 13 14 9
  Firms Raising Avg. Selling Prices (Net %) 15 12 9 -15 -12 -20 17
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