Small business owner confidence firmed last month, according to a new report from the National Federation of Independent Business (NFIB). Specifically, the headline sentiment index ended October at 103.8, a smaller rebound than expected following September’s sharp decline but still one of the higher readings of the current business cycle. Under the hood, four of the ten main components that make up the optimism gauge improved last month, including large gains in surveyed owners’ expectations for sales growth and expansion plans. Small business labor conditions also strengthened in October, with net job creation jumping to the best reading since May, and the number of job listings matching a record high. Further, wage growth accelerated last month and reported plans to boost worker compensation in the next three months increased to a nearly 2-year high.
That is not too surprising since 52 percent of surveyed small business owners complained about there being few or no qualified applicants for job vacancies. Moreover, quality of labor has finally replaced government regulation as the 2nd-most important problem facing surveyed small business owners. The top reported problem remains taxes but lawmakers in Washington have a chance to change this. NFIB chief economist William C. Dunkelberg added that “Congress has taken its first cut at tax reform and small business owners are eagerly waiting to see how the developing legislation will benefit them. Historically, Congress has given inadequate consideration of the impact of their laws on small firms, paying more attention to lobbies from the largest firms and unwittingly saddling small firms with costly and inappropriate (of little or no value to society) regulations promulgated for large firms. Owners remain hopeful that whatever the final tax legislation looks like, it will be a positive change from current law.”
Sources: NFIBPost author: Charles Couch