Small Business Optimism Rises Moderately in October

The NFIB Small Business Optimism Index ticked upwards to 103.8, 0.8 point above September’s reading. Four of the ten index components rose, while five declined. Twenty-three percent of business owners surveyed said the next three months was a good time to expand, six points higher than last month’s reading.

Reported job creation grew two points, as 59% of businesses reported hiring or trying to hire. However, 52% reported few or no qualified applicants for the positions they were trying to fill. Twenty percent of employers surveyed cited the difficulty of finding qualified workers as their top business problem. A seasonally adjusted net 18% of owners plan to create new jobs, down one point from the previous month.

Seasonally adjusted, the net percent of owners expecting better business conditions increased one point to 32%. The percent of owners reporting higher sales in the past three months compared to the prior three months was a net 1%, unchanged from September’s reading. Seasonally adjusted, the net percent of owners expecting higher real sales volumes rose six points, growing to 21% of owners. Capital spending fell was unchanged as 59% of owners reported capital outlays. The percent of owners planning capital outlays in the next 3 to 6 months was also unchanged, remaining at 27%.

Credit conditions remained historically low, as 4% of owners reported that all their borrowing needs were not met, a two-point rise from September. Only 2% of business owners surveyed reported that financing was their top business problem, compared to 21% citing taxes.

Read the NFIB report.

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About Stephen Newton

Stephen Newton is an economic research associate at ABA.