Index Up 0.2 Points To 96.1, Still At Lower Level Than Average
On Tuesday, NFIB released its monthly Small Business Optimism Index results. For September, the survey of 656 US small business owners showed the index was relatively flat, rising 0.2 points to 96.1. This comes after another small gain in August of 0.5 points. NFIB Chief Economist William Dunkelberg called the summer’s optimism readings “less than impressive.” The September survey results showed that seven components of the total index “posted small gains,” but 3 declined, “including a large decline in the net percent of owners expecting stronger real sales volumes in the next few months.” The overall reading of 96.1 is “well below the 42 year average of 98,” but is “consistent with expected economic growth of about 2.5%,” Dunkelberg said.
24/7 Wall Street (NY) reported that the survey showed small business owners “said their single most important problem is taxes (22%), government regulations and red tape (22%) or quality of labor (16%),” while their “least important problems are financing and interest rates (1%) and inflation (2%).” The data show some indication of the future of US small business jobs, Business Insider suggested. Insider reported that the survey found “23% of firms reported increases to compensation in the past three months,” while “a seasonally-adjusted net 16% plan to raise compensation in the coming months,” up 3% from August. At the same time, 45% of those surveyed said there were “few or no qualified applicants” for open jobs, a number that “has been trending higher since 2009” and been in the mid-to-high 40s since May 2014. Insider concluded, “these factors suggest that American workers should soon see higher wages.”
What This Means For Small Businesses
The latest survey indicates that small business owners’ optimism, while higher, is flagging amid uncertainty over a tightening labor market and possible interest rate hikes, as well as the continued addition of burdensome government regulations. There is a long way to go to help small business owners feel great about the US business outlook.
Additional Reading
Investors Business Daily and MarketWatch also covered the NFIB survey.
Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.