Small Business Optimism Rises in April

The NFIB Small Business Optimism Index rose to 96.9 in April, up 1.7 points from the previous month. Nine of the ten indices reported increases or remained unchanged for the month, while expectations for real sales increases declined by 3 points. The percent of businesses believing the next three months to be a good time for expansion was unchanged.

The number of owners reporting plans to increase employment rose by 1 point. Fifty-three percent of owners reported hiring or trying to hire, while 44 percent reported difficulty filling positions due to a lack of qualified applicants.

The earnings trends index rose by 6 points. Reports of increased labor compensation rose to a net 23 percent of all owners. Furthermore, a seasonally adjusted net 14 percent of owners surveyed plan to raise compensation in the coming months, although rising benefit costs may offset increases in employee take-home pay.

A historically low number of business owners responded that all of their credit needs were not met, with 2 percent reporting that financing was their top business problem. Government requirements and red tape was the single most important problem cited by small business owners, followed by taxes and quality of labor.