NFIB Small Business Optimism – September 2015

The September NFIB Small Business Optimism report was released today, October 13, 2015. The headline of the Small Business Economic Trends report is “Small Business Optimism Continues To Be Low.”

The Index of Small Business Optimism increased .2 points in September to 96.1.

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

NFIB’s Small Business Optimism Index was basically unchanged from August to September. Reading 96.1, the Index gained 0.2 points and remains well below the 42 year average of 98.



Overall, a solid improvement in hiring activity. There was no evidence in the NFIB data that job creation slacked off sharply from June and July, each with 245,000 jobs. Reported job creation returned to its best level of the year, with owners adding a net 0.18 workers per firm in recent months, up 0.05 from August. Fifty-three percent reported hiring or trying to hire (down 3 points), but 45 percent reported few or no qualified applicants for the positions they were trying to fill. Fourteen percent reported using temporary workers, down 1 point after a cumulative 3 percentage point decline over the past few months. Twenty-seven percent of all owners reported job openings they could not fill in the current period, down 2 points from the highest reading for this year. Highly correlated with the unemployment rate, little change is expected. A net 12 percent plan to create new jobs, down 1 point. Historically this is a solid number and supportive of positive job creation.



Fifty-eight percent reported capital outlays, unchanged from August. Seven percent acquired new buildings or land for expansion (unchanged) and 14 percent spent money for new fixtures and furniture (up 1 point). Overall, capital spending was basically flat. The percent of owners planning capital outlays in the next 3 to 6 months gained 1 point to 25 percent, not a strong reading historically but among the better in this expansion. Of the 51 percent of owners who said it was not a good time to expand (up 1 point), 22 percent (up 2 points) blamed the political environment.

Seasonally adjusted, the net percent expecting better business conditions rose 2 points to a net negative 4 percent, a rather negative outlook for “expansion”. The seasonally adjusted net percent expecting higher real sales fell 6 points to a net 1 percent of all owners. Owner expectations for the economy overall appear to anticipate a continuation of “under-performance”. Investment plans remain historically sub-par, and owners have little interest in borrowing to support investment spending that promises little return.

Here is a chart of the NFIB Small Business Optimism chart, as seen in the October 13 Doug Short post titled “NFIB:  Small Business Index Up .2 In September“:

NFIB Small Business Optimism

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


The Special Note summarizes my overall thoughts about our economic situation

SPX at 2017.46 as this post is written