There were two important reports on the U.S. economy released this morning. First, the National Federation of Independent Business’s (NFIB’s) small business optimism index rose to 105.2 in July, the highest reading since February and a much larger rebound than expected following the post-election low hit in June. Under the hood, seven of the ten main components that make up the sentiment index improved in July, including large gains in surveyed owners’ expectations for sales growth and the overall economy. As for small business labor conditions, net job creation in July turned positive and gauges of hiring plans and total job openings rose to the best levels of 2017. At the same time, worker compensation increased markedly, which is not surprising since 52 percent of surveyed small business owners complained that there are few or no qualified applicants for open positions, and all-time high. Moreover, quality of labor in July became the 2nd-most important problem facing surveyed small business owners, just below taxes but above government regulation and red tape.
Elsewhere, the latest job openings and labor turnover survey (JOLTS) from the Bureau of Labor Statistics, one of Federal Reserve Chair Janet Yellen’s favorite economic indicators, showed that there were 6.163 million job openings in America in June (lagged release). That is a new all-time high and significantly better than economists had anticipated. The biggest gains in June were found in the professional and business services (+179K), education and health services (+123K), construction (+62K), and trade transportation (+41K) categories. The number of unemployed Americans per job opening, though, and the ratio of quits to layoffs and discharges both deteriorated slightly in June. However, those measures still remain near record levels, and the latter continues to highlight U.S. workers’ increased willingness to give up their current job security for better employment opportunities.
Sources: Econoday, Bloomberg, Twitter, NFIB, U.S. DoL, FRBSLPost author: Charles Couch