NFIB: Small Business Survey: “No Signs Of Strength In The Small Business Sector”

Written by Jill Mislinski

The latest issue of the NFIB Small Business Economic Trends is came out Tuesday morning. The headline number for August came in at 94.4, down 0.2 from the previous month’s 94.6. The index is at the 24th percentile in this series. The index is at the 25th percentile in this series. Today’s number came in below the Investing.com forecast of 94.9.

Here is an excerpt from the opening summary of the news release.

The Index of Small Business Optimism declined two-tenths of a point in August to 94.4, with owners refusing to expand; expecting worse business conditions; and unable to fill open positions, according to the National Federation of Independent Business (NFIB).

“Once again, the NFIB survey showed no signs of strength in the small business sector,” said NFIB Chief Economist Bill Dunkelberg. “Uncertainty seems to be the major enemy of economic progress and the political climate is a major contributor to the high levels of uncertainty that we’ve seen. The current economic environment is not a good one for strong or sustained growth.”

The first chart below highlights the 1986 baseline level of 100 and includes some labels to help us visualize that dramatic change in small-business sentiment that accompanied the Great Financial Crisis. Compare, for example the relative resilience of the index during the 2000-2003 collapse of the Tech Bubble with the far weaker readings following the Great Recession that ended in June 2009.

Here is a closer look at the indicator since the turn of the century. The post-recession interim high of 100.4 occurred in December 2014.

The average monthly change in this indicator is 1.3 points. To smooth out the noise of volatility, here is a 3-month moving average of the Optimism Index along with the monthly values, shown as dots.

Here are some excerpts from the report.

Labor Markets

Reported job creation remained weak in August with the seasonally adjusted average employment change per firm posting a decline of -0.02 workers per firm. Fifty-six percent reported hiring or trying to hire (up 3 points), but 48 percent reported few or no qualified applicants for the positions they were trying to fill. Fifteen percent of owners cited the difficulty of finding qualified workers as their Single Most Important Business Problem.