Small Business Optimism Slipped in February

The NFIB Small Business Optimism Index fell 1 point to 92.9 in February. Six of the ten components posted declines on the month, while four components were unchanged.

Labor market conditions weakened in February, as 49 percent of small businesses reported hiring or trying to hire, down from 52 percent in January. Forty-two percent of employers reported few or no qualified applicants for available positions, down 3 percentage points from the previous month. A seasonally adjusted net 10 percent of employers plan to create new jobs, down 1 point from January and 5 points from December.

The percent of owners reporting higher sales in the past three months rose to a net negative 6 percent, up 1 point from January. Eleven percent of small business owners reported weak sales as their top business problem, down 1 point from the previous month.

Capital spending continued to slow, with 58 percent of businesses reporting capital outlays, down 3 points on the month. The percent of owners planning capital outlays in the next 3 to 6 months fell 2 points to 23 percent.

Credit conditions deteriorated slightly, as 4 percent of owners reported that all their borrowing needs were unmet, up 1 point from January. Fifty-two percent of respondents explicitly said they did not want a loan, up 2 points on the month. Just one percent of owners cited financing as their top business problem, compared to 5 percent during the great recession.

Read the NFIB release.