Tuesday, August 12, 2014

Small Business Optimism Edges up in July

The NFIBs Small Business Optimism index rose to 95.7 in July from 95.0. July’s uptick was mainly seen in the rise of the index components that relate to future plans and expectations. The most substantial increases from the previous month came from expectations that the economy will improve and expected improvements in credit conditions allowing expansion.

Financing continues to be the least cited concern holding back small business conditions, with 2% of respondents citing it as the single more important problem. Taxes shared the top spot with government requirements and red tape, each rising 1% to 22%, followed by poor sales with 13%.

Six of the ten index components improved slightly, three components declined and one component, earnings trends, was unchanged. Expectations that the economy will improve increased 4 points to -6%, an improvement from the 10 point drop the previous month.

Current job openings took the biggest hit, dropping 2 points to 24%. However, July was the tenth consecutive positive month in terms of employment gains, and the best string of gains since 2006.

The percent of owners reporting higher nominal sales in the past 3 months compared with the prior 3 months fell 1 point to -3%, albeit still one of the best readings since 2007.

Read the NFIB report.

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