By Joyce Hanson
After seven straight quarters of readings below 90, the National Federation of Independent Business’ index of small business optimism showed a 3.8-point gain in April, rising to 90.6. While nine of the 10 NFIB index components rose, particularly the outlook for general business conditions and sales, job measures barely moved and capital expenditure plans were flat.
The persistence of NFIB index readings below 90 is unprecedented in its 35-year history. The April index was based on 2,176 respondents in a random sampling of NFIB member firms.
“We were surprised by the March dip–perhaps due to the early Easter?–so this is a welcome rebound,” said Ian Shepherdson, chief U.S. economist for High Frequency Economics, in an analyst note. “But the level of the index is still very depressed: If the whole economy were small businesses, this survey suggests it would still be contracting at a 3% rate.”
The details showed no significant change in capital spending or hiring intentions, which remained very weak, but expected sales and earnings improved markedly, Shepherdson added. Inventories rose sharply and selling price expectations jumped to -11 from -20.