NFIB Small Business Optimism – July 2015

The May NFIB Small Business Optimism report was released yesterday, August 11, 2015. The headline of the Small Business Economic Trends report is “After Two Steps Backwards In June, Small Business Optimism Takes One Step Forward In July.”

The Index of Small Business Optimism increased 1.3 points in July to 95.4.

Here are some excerpts from that I find particularly notable (but don’t necessarily agree with):

“July has produced the most grudging of gains in the Index’s history and is still not above the 42 year average of 98.0, 99.5 through 2007. This leaves current readings just over two points below the average and five points below the December 2014 reading.”- Bill Dunkelberg, NFIB Chief Economist



Job creation was flat in July. On balance, owners added a net 0.05 workers per firm in recent months, better than June’s -0.01 reading, but still close to the zero line. Fifty-seven percent reported hiring or trying to hire (up 5 points), but 48 percent reported few or no qualified applicants for the positions they were trying to fill. Sixteen percent reported using temporary workers, down 2 points. Twenty-five percent of all owners reported job openings they could not fill in the current period, up 1 point, but 4 points below the highest reading for this year. A net 12 percent plan to create new jobs, up 3 points reversing last month’s loss.



Four percent of owners reported that all their borrowing needs were not satisfied, historically low. Thirty-two percent reported all credit needs met, and 51 percent explicitly said they did not want a loan. For most of the recession, record numbers of firms have been on the “credit sidelines”, seeing no good reason to borrow. Only 2 percent reported that financing was their top business problem compared to 22 percent citing taxes, 21 percent citing regulations and red tape and 10 percent citing weak sales.

The availability of qualified labor has replaced weak sales in third position, cited by 13 percent as the number one problem. In the Great Recession, no more than 5 percent cited credit availability and interest rates as their top problem compared to as high as 37 percent in the Volcker era. Thirty percent of all owners reported borrowing on a regular basis, down 1 point. The average rate paid on short maturity loans rose 20 basis points to 5.2 percent. Loan demand remains historically, owners can’t find many good reasons to borrow to invest when expectations for growth are not very positive.

Here is a chart of the NFIB Small Business Optimism chart, as seen in the August 11 Doug Short post titled “NFIB:  Small Business Optimism Up 1.3 In July“:

NFIB Small Business Optimism

Further details regarding small business conditions can be seen in the full July 2015 NFIB Small Business Economic Trends (pdf) report.


The Special Note summarizes my overall thoughts about our economic situation

SPX at 2056.03 as this post is written