The December NFIB Small Business Optimism report was released yesterday, December 10. The headline of the Press Release is “Small Business Optimism Sees Slight Bump in November.” The subtitle is “Few Positive Signs for the Future.”
The Index of Small Business Optimism increased .9 points in November to 92.5.
Here are some excerpts from the Press Release that I find particularly notable (but don’t necessarily agree with) :
• Sales. The net percent of all owners (seasonally adjusted) reporting higher nominal sales in the past 3 months compared to the prior 3 months was unchanged at a negative 8 percent. Fifteen percent still cite weak sales as their top business problem. The net percent of owners expecting higher real sales volumes rose 1 point to 3 percent of all owners after falling 6 points in October (seasonally adjusted), a weak showing. Not much help for hiring or inventory investment in those numbers.
• Earnings and Wages. Earnings trends deteriorated a bit in November, falling to a net negative 24 percent. If these were publically traded companies, the stock indices would not look good. The economy remains bifurcated, large firms doing fairly well, small businesses showing little growth or improvement.
• Credit Markets. Credit continues to be a non-issue for small employers with just 4 percent of the owners reporting that all their credit needs were not met, down 2 points. Thirty-two percent reported all credit needs met, and 52 percent explicitly said they did not want a loan. Twenty-nine percent of all owners reported borrowing on a regular basis, up 1 point but a near-record low. The average rate paid on short maturity loans was steady at 5.4 percent.
• Inflation. Seasonally adjusted, the net percent of owners raising selling prices was 2 percent, down 3 points. Seasonally adjusted, a net 19 percent plan price hikes, up 1 point. Not much of this is likely to “stick” if owners are correctly forecasting the future of the economy over the next six months.
Here is a chart of the NFIB Small Business Optimism chart, as seen in Doug Short’s December 10 post titled “Small Business Sentiment: ‘Optimism Up Slightly’” :
(click on chart to enlarge image)
The Special Note summarizes my overall thoughts about our economic situation
SPX at 1802.62 as this post is written