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US: NFIB Small Business Optimism Index
| Consensus | Consensus Range | Actual | Previous | |
| Index | 99.8 | 99.5 to 100.8 | 99.3 | 99.5 |
Highlights
The NFIB small business optimism index remains in a narrow range around the 52-year average of 98 for the tenth month in a row in January. January reflects relatively stable conditions with most index components showing little change from the prior month. Nonetheless, the index remains only narrowly above the level that suggests broad confidence about conditions for small businesses.
The January index is 99.3, a negligible decrease from 99.5 in December but well below the optimism of 102.8 in January 2025. The January reading is a little below the consensus of 99.8 in the Econoday survey of forecasters. The NFIB uncertainty index is up 7 points to 91 in January. Political turmoil at home and disordered geopolitical situations abroad are causing small businesses to view the outlook with more caution.
There is overall little change in the 10 index components in January with three higher and seven lower. Most were well within the norma month-to-month variation of a point or two. The component with the largest increase is expectations for higher sales which is up 6 points to 16 percent. The component with the largest decrease is expectations for the economy to improve which is down 3 points to 21 percent.
The index components related to the labor market show current job openings down 2 points to 31 percent in January and hiring plans down 1 point to 16 percent. The subcomponent for the availability of qualified applications is a improved at down 4 points to 44 percent. The subcomponents for compensation show compensation plans are still being outstripped in actual compensation. The index for planned compensation is down 2 points to 22 percent in January while actual compensation is down 1 point to 32 percent.
Unsurprisingly for a January report, among survey respondents, 18 percent cite taxes as their single most important problem.
Market Consensus Before Announcement
Sentiment expected to improve again to 99.8 for January from 99.5 in December and 99.0 in November.
Definition
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 10 seasonally adjusted components based on the following questions: 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.
Description
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.
