|level||96.0||94.8 to 97.0||95.9||95.4|
A solid gain in job openings and a solid bounce back for earnings trends helped lift the small business optimism index 4 tenths to 95.9 vs Econoday expectations for 96.0. The index shows no immediate effect from troubles in China and global volatility. Hiring, capital spending and inventory investment plans firmed slightly, collectively adding 2 points. But the two outlook components collectively declined 4 points in readings that do not point to a big second-half finish for the economy.
Market Consensus Before Announcement
There may be a lot of turmoil underway in the global markets, but forecasters see the small business optimism index rising 6 tenths in August to 96.0. This report has been mostly positive and has been pointing to second-half strength for the economy. And small businesses have been saying they have job openings that are hard to fill, in line with the shrinkage underway in the available labor force.
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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