The April NFIB Small Business Optimism report was released today, April 8. The headline of the Press Release is “NFIB: Small-Business Owner Roller Coaster Continues.” The subtitle is “After February’s Decline, Confidence Up in March”
The Index of Small Business Optimism increased 2.0 points in March to 93.4.
Here are some excerpts from the Press Release that I find particularly notable (but don’t necessarily agree with) :
“Overall, the March gain more or less reversed the February decline. While the Index still can’t seem to get above 95, we can be encouraged that the economy is at least crawling forward and not heading in reverse,” said NFIB chief economist Bill Dunkelberg. The outlook for real sales gains accounted for about half of the improvement with inventory satisfaction and inventory investment plans accounting for most of the rest. However, throughout this recovery we’ve seen these types of increases only to have them go nowhere. As long as Washington continues to ignore policies that could restore the middle class, job creation will continue to be sub-par.”
Credit Markets. Credit continues to be a non-issue for small employers. In March only 5 percent of owners reported that all their credit needs were not met, 1 point above the record low. Thirty percent reported all credit needs met, and 48 percent explicitly said they did not want a loan. Only 2 percent reported that financing was their top business problem compared to 21 percent citing taxes, 21 percent citing regulations and red tape and 14 percent citing weak sales.
Inflation. Twelve percent of the NFIB owners reported reducing their average selling prices in the past 3 months (down 3 points), and 23 percent reported price increases (up 4 points). Seasonally adjusted, the net percent of owners raising selling prices was a net 9 percent, up 8 points. Only 3 percent plan reductions (unchanged), far fewer than actual reported reductions. Seasonally adjusted, a net 19 percent plan price hikes (down 4 points). If successful, the economy may see a bit more “inflation”.
Here is a chart of the NFIB Small Business Optimism chart, as seen in the April 8 Doug Short post titled “Small Business Sentiment improved in March“ :
The Special Note summarizes my overall thoughts about our economic situation
SPX at 1849.22 as this post is written