|level||96.0||95.3 to 96.5||96.9||95.2|
The small business optimism index rose solidly in April, up 1.7 points to a higher-than-expected 96.9 which is outside Econoday's high-end forecast of 96.5. Eight of 10 components gained in the month which is very strong, led by earnings trends and including job readings.
Inventories are considered too low and restocking is planned which is a special plus for the sample's hiring and output. Note that readings on inventories in other reports point to the opposite, unwanted overhang that may slow economic growth.
This report is very positive, pointing, at least for the small business sector, to solid springtime acceleration.
Market Consensus Before Announcement
The first-quarter slowdown clearly dented the NFIB small business optimism index where the economic outlook component showed special weakness. But forecasters see a solid uptick for April, to a consensus 96.0 vs 95.2 in March.
The small business optimism index is compiled from a survey that is conducted each month by the National Federation of Independent Business (NFIB) of its members. The index is a composite of ten seasonally adjusted components based on questions on the following: plans to increase employment, plans to make capital outlays, plans to increase inventories, expect economy to improve, expect real sales higher, current inventory, current job openings, expected credit conditions, now a good time to expand, and earnings trend.
Small businesses are responsible for a majority of new job creation and the NFIB focuses on this sector of the economy. The direction of the health of small businesses can portend changes in the stock market - especially small caps.
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