Small Business Optimism Slipped in January

The NFIB Small Business Optimism Index fell 1.3 points to 93.9 in January. Three of the ten index components posted gains on the month, while six components declined.

Labor market conditions weakened some but remained healthy, as 52 percent of small businesses reported hiring or trying to hire, compared to 55 percent in December. Forty-five percent of employers reported few or no qualified applicants for available positions. A seasonally adjusted net 11 percent of employers plan to create new jobs, down 4 points from the previous month.

The percent of owners reporting higher sales in the past three months fell to a net negative 7 percent, down 2 points from December. Twelve percent of small business owners reported weak sales as their top business problem, up 1 point from December.

Capital spending slowed as well, with 61 percent of businesses reporting capital outlays, down 1 point on the month. The percent of owners planning outlays in the next 3-to-6 months was unchanged at 25 percent.

Credit conditions remained satisfactory, as 3 percent of owners reported that all their borrowing needs were unmet. Fifty percent of respondents explicitly stated that they did not want a loan, down 2 points from December. Just 2 percent of owners cited financing as their top business problem, compared to 5 percent during the great recession.

Read the NFIB release.