|level||93.6||93.5 to 93.9||92.6||92.9|
Small business owners remain pessimistic, with the small business optimism index dipping another 0.3 points in March to 92.6, surpassing February's two year low and remaining well below the 42-year average of 98. Four of the 10 component indices posted a gain and six posted declines. Among the most optimistic parts of the index, plans to increase capital outlays rose to remain at very solid levels while the job openings were a little less hard to fill in March, but still very hard. But earnings trends continued turning from bad to worse in March, and though small business owners were more optimistic than in February in their expectations that the economy will improve, this component of the index is still in deep pessimistic territory at a net negative 17 percent.
Market Consensus Before Announcement
The small business optimism index dropped noticeably in February and a solid rebound is expected for March, at a consensus 93.6 for what would be a 7 tenths gain. February was held down by slowing in labor market components with sales expectations and earnings trends very weak. Softness in this report has underscored the moderate degree of economic growth.
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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