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NFIB’s small-business optimism index slips in September

By Eric Reinhardt


The National Federation of Independent Business (NFIB) reported Tuesday that its index of small-business optimism fell 0.8 points in September to 95.3 and indicated that small-company owners’ confidence is “stuck in a rut.”

The statistical measure is now five points below its pre-recession average, which spanned from 1973 to 2007, the NFIB said in a news release. 

Four index components improved, while six declined, according to the NFIB data. 

Two components declined by a total of 10 points, accounting for the entire decline in the index score. 

The “current job openings” and “plans to make capital outlays” components, which are directly relevant to growth in GDP and hiring, fell “drastically,” declining a total of 10 points, according to the NFIB.

The components that improved included “expect economy to improve,” “plans to increase inventories,” “current inventory,” and “now a good time to expand.”

In addition to the job openings and capital-outlays components, others that declined included “plans to increase employment,” “expect real sales higher,” “expected credit conditions,”  and “earnings trends,” according to the NFIB data.

Small businesses just can’t seem to get out of second gear, William (Bill) Dunkelberg, NFIB chief economist, said in the news release.

“In order for the Index to get back to the average, responses to the 10 Index component questions would have to improve 50 percentage points cumulatively. That’s a lot of ‘positive’ responses to make up to get back to ‘average’ much less reach a level that means a solid recovery,” said Dunkelberg.  “A decline in job openings and capital-spending plans were primarily responsible for September’s Index decline. Overall, small-business owners are still stuck in a rut that has been difficult to escape.”

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