US: NFIB Small Business Optimism Index

Tue Oct 13 05:00:00 CDT 2015

Consensus Consensus Range Actual Previous
level 95.8 94.8 to 96.5 96.1 95.9

In a confirmation of strong levels of job openings in the JOLTS report, small businesses are reporting the most difficulty in finding qualified workers since 2007, pointing to the risk ahead of wage pressures. Boosted by employment, the small business optimism index inched 2 tenths higher in September to a slightly higher-than-expected 96.1. Plans to increase employment are also up, at their best level of the year, while capital outlay plans are also positive. Earnings trends are in the negative column as are expected credit conditions. Overall, this report is moderate though the strength in employment could raise talk of strength for the October employment report.

Market Consensus Before Announcement
The small business optimism index is expected to hold steady at a moderate 95.8 in September. Job openings were up solidly in August and another gain for this component could lift the outlook for the October employment report.

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.