|level||95.0||93.9 to 96.0||95.4||94.1|
Small business optimism improved in July, up 1.3 points to a better-than-expected 95.4. Employment appears to be tight with one in four small businesses saying they have job openings that are hard to fill. Capital spending plans are also up while on the negative side earnings are down. This is a mostly positive report that points to second-half strength for the economy.
Market Consensus Before Announcement
The small business optimism index is expected to bounce back to 95.0 in July from June's sharp 4.2 point drop to 94.1. June's report was a surprise, signaling weakness for what proved to be a respectable month for the economy. Job openings and expansion plans, two key components, were especially weak in June.
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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