Small Business Optimism Index Reaches Highest Level Since 2006

Date: January 14, 2015

Component Suggests To Media That Wage Pressure May Be Forthcoming

On Tuesday, the National Federation of
Independent Business released the latest edition of its Small Business Optimism
Index, which showed that optimism rose 2.3 points to 100.4 in December. That’s
more than expected by economists; for example, those interviewed by the Wall
Street Journal expected only a small increase to 98.5. Media coverage latched onto the data as a sign
that the economy continues to improve. However, a secondary but common point of
media interest was the component of the index that showed that the percentage
of small businesses saying that they have either raised compensation recently
or expect to do so in the next three months is also at its highest point since
2006. Media outlets tended to see that as a sign that wage pressures are
growing as the labor market improves.

What This Means For Small Business:

In
general, the December index is a sign that the broader economic growth of the
past several quarters is finally making its way to the small business
environment. However, if wage pressures do materialize, it could signal a
significant challenge for entrepreneurs in the new year.

Additional Reading:

Among those media
outlets reporting on the index are the Washington
Post
, the Wall
Street Journal
,
Reuters and ZDNet.

Read the latest edition of NFIB’s Small Business Economic Trends Report.

This news article is intended to keep small business owners apprised of current events that may affect them. It does not necessarily reflect NFIB’s policy position on such issues.

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