US: NFIB Small Business Optimism Index

Tue Nov 10 05:00:00 CST 2015

Consensus Consensus Range Actual Previous
level 96.4 96.0 to 97.2 96.1 96.1

The small business optimism index remains unchanged, at a moderate 96.1 in October. In confirmation of tightness in the labor market, small businesses continue to report the most difficulty in finding qualified workers since 2007. And small businesses are looking for new employees with hiring plans remaining solid, and they are especially looking to increase capital outlays which is a key indication of confidence in their own business outlook. Earnings trends, however, are decidedly negative and the general outlook for the economy is soft.

Market Consensus Before Announcement
The small business optimism index has been very solid, especially employment where hiring plans have been at their best levels of the year. And in a hint of wage pressures to come, small businesses have been reporting the most difficulty of the recovery in finding qualified employees. Capital outlays in this report have also been positive.

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.