NFIB Small Business Optimism – August 2014

The August NFIB Small Business Optimism report was released today, August 12.  The headline of the Press Release is “NFIB SBET: Small Business Optimism Ticks Up Slightly.”

The Index of Small Business Optimism increased .7 points in July to 95.7.

Here are some excerpts from the Press Release that I find particularly notable (but don’t necessarily agree with) :

July’s Optimism Index technically rose 0.7 points to a reading of 95.7. There was little change in the 10 Index components other than outlook for expansion and business conditions which accounted for the small gain in the Index. Even though these improved, they still remain historically low.

also:

•    Sales.  The net percent of all owners (seasonally adjusted) reporting higher nominal sales in the past 3 months compared to the prior 3 months fell 1 point to a net negative 3 percent,  still one of the very best readings since 2007. Thirteen percent cited weak sales as their top business problem, one of the lowest readings since December, 2007, the peak of the expansion. Expected real sales volumes posted a 1 point decline, falling to a net 10 percent of owners expecting gains. 

also:

•    Credit Markets. Six percent of the owners reported that all their credit needs were not met, unchanged and only 2 points above the record low. Thirty percent reported all credit needs met, and 52 percent explicitly said they did not want a loan. Only 2 percent reported that financing was their top business problem compared to 22 percent citing taxes, 22 percent citing regulations and red tape and 13 percent citing weak sales. 

The net percent of owners expecting credit conditions to ease in the coming months was a seasonally adjusted negative 5 percent; more owners expect that it will be “harder” to arrange financing than easier (a 2 point improvement). This is the most favorable reading about credit market conditions since 2006, occurring at a time when the Fed is terminating its aggressive QE3 policy.  

Here is a chart of the NFIB Small Business Optimism chart, as seen in the August 12 Doug Short post titled “Small Business Sentiment:  'Optimism Ticks Up Slightly'“ :

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Further details regarding small business conditions can be seen in the Small Business Economic Trends document as well as the full August 2014 NFIB Small Business Economic Trends report (pdf).

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 1930.33 as this post is written