The NFIB Small Business Optimism Index posted a strong increase of 7.4 points in December to 105.8, the highest reading in twelve years. Seven of the ten index components rose, while two declined and one was unchanged.
Even with the increased optimism, reported job creation remained weak in December, as only 51% of businesses reported hiring or trying to hire. Forty-four percent reported few or no qualified applicants for the positions they were trying to fill. Twelve percent of employers surveyed cited the difficulty of finding qualified workers as their top business problem. A seasonally adjusted net 16% of owners plan to create new jobs, which is the strongest reading in the recovery.
Seasonally adjusted, the net percent of owners expecting better business conditions shot up 38 points to a net 50%. The percent of owners reporting higher sales in the past three months rose 1 point to a net negative 7%. Seasonally adjusted, the net percent of owners expecting higher real sales volumes rose 20 points to a net 31% of owners. Capital spending jumped as 63% of owners reported capital outlays, up 8 points from November. The percent of owners planning capital outlays in the next 3 to 6 months increased 5 points to 29%.
Credit conditions held steady, as 4% of owners reported that all their borrowing needs were not met. Only 2% of business owners surveyed reported that financing was their top business problem, unchanged from the past two months.
Read the NFIB report.