The National Federation of Independent Business’s (NFIB’s) small business optimism index ended September at 103.0, the lowest headline reading in almost a year and the largest monthly decline since June 2015. Under the hood, six of the ten main components that make up the sentiment gauge deteriorated last month, including sharp declines in surveyed owners’ expectations for sales growth and capital expenditures.
Although disappointing, NFIB chief economist William C. Dunkelberg stressed that much of the weakness in September was due to hurricanes Harvey and Irma and added that “recovery spending will provide a significant boost to economic activity in the fourth quarter and into 2018, reducing the odds of a recession next year.” As for small business labor conditions, net job creation turned negative last month for the first time since June but this was offset by reported hiring plans lifting to a record high. Moreover, a greater share of surveyed small business owners said that they plan to boost worker compensation in the coming months, not surprising with almost half of respondents complaining about few or no qualified applicants for open positions.
Sources: NFIBPost author: Charles Couch