The latest NFIB Small Business Optimism Index shows an upbeat employer community, even acknowledge the staple of our day, i.e., uncertainty.
The small business half of the economy continued its remarkable economic streak, posting a 0.6 point gain in October’s Optimism Index. The 102.4 reading was buoyed by eight of the 10 Index components advancing, as talk of a recession waned in October. The Uncertainty Index declined 4 points but remains historically high heading into an election year.
Yes, it’s an opinion survey. Nothing more. But attitude matters, because optimists invest, plan for expansion, and hire employees. That’s the point made by the NFIB CEO.
A continued focus on a recession by policymakers, talking heads, and the media clearly caused some consternation among small businesses in previous months, but after shifting their focus to other topics, it’s become clear that owners are not experiencing the predicted turmoil,” said NFIB President and CEO Juanita D. Duggan. “Small business owners are continuing to create jobs, raise wages, and grow their businesses, thanks to tax cuts and deregulation, and nothing is stopping them except for finding qualified workers.”
Again, note there’s the persistent labor challenge.
Key findings from October’s index included:
- The October increase was led by GDP-producing plans for job creation, inventory investment, and capital spending.
- Reports of actual capital spending increased and inventory investment improved from a modest negative level in September.
- Reports of rising labor compensation increased and remained strong historically, and the frequency of plans to raise compensation also rose in October.
- Reports of higher selling prices remained subdued, so rising labor costs are still not pushing up inflation on Main Street.
- Actual job creation in October exceeded that in September, as small businesses continued to hire and create new jobs.
All in all, relatively good news from the small business sector, though long-term concerns remain valid.