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- Japan: Index of Business Conditions (Feb-Final), Electric Power Generated (Jan)
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Economy in Brief
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U.S. Initial Unemployment Insurance Applications Increase
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Japan trade trends, broadly considered, seem to be stabilizing...
U.S. Mortgage Loan Applications Fall
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by Tom Moeller January 10, 2017
The National Federation of Independent Business reported that its Small Business Optimism Index surged 7.5% during December (11.1% y/y) to 105.8. It was the strongest level of optimism since December 2004. During all of last year, the optimism index eased to 95.3 from 96.1 in 2015.
A strengthened 50% of firms reported they were expecting the economy to improve, the most since March 2002. Another area of strength was 31% of firms expected higher real sales in six months, up from 11% in November. Twenty-three percent of firms reported that now was a good time to expand the business, an eleven-year high.
On the labor front, a stronger 16% planned to increase employment. Potential employees seemed easier to come by, however, as a greatly lessened 44% of firms indicated they had few or no qualified candidates to fill job openings. Hiring difficulty caused an increased 26% percent of firms to raise worker compensation. A sharply higher 20% planned to raise worker compensation, the most since December.
Fully 29% of firms were planning to make capital outlays in the next 3-6 months, the most since August 2014. A strengthened 4% were raising inventories now.
On the price inflation front, a sharply increased 24% of businesses were planning to raise average selling prices, the most since 2008. An increased 6% of firms actually raised average selling prices last month, versus none in Q3'16.
A higher 21% of firms indicated that taxes were the single most important problem, and a higher 19% reported that government requirements were the largest single problem. A reduced 12% felt challenged by the quality of labor, while a stable 12% of firms indicated that poor sales were the largest single problem. A reduced 8% of firms reported insurance cost & availability as the largest hurdle. A higher 9% reported competition from large businesses as the largest problem, but a lessened 5% felt that cost of labor was their largest single problem. Inflation as the largest problem was indicated by a reduced 2% of respondents, the most in 6 months.
Roughly 24 million small businesses exist in the U.S. and they create 80% of all new jobs. The typical NFIB member employs 10 people and reports gross sales of about $500,000 a year. The NFIB figures can be found in Haver's SURVEYS database.
|National Federation of Independent Business (SA, Net %)||Dec||Nov||Oct||Dec'15||2016||2015||2014|
|Small Business Optimism Index (1986=100)||105.8||98.4||94.9||95.2||95.3||96.1||95.6|
|Firms Expecting Economy To Improve||50||12||-7||-15||-5||-5||-5|
|Firms Expecting Higher Real Sales||31||11||1||7||5||8||11|
|Firms Reporting Now is a Good Time To Expand the Business (% of Firms)||23||11||9||8||10||12||10|
|Firms Planning to Increase Employment||16||15||10||15||11||12||10|
|Firms With Few or No Qualified Applicants For Job Openings||44||52||48||48||46||46||43|
|Firms Reporting That Credit Was Harder To Get||6||4||4||5||5||4||6|
|Firms Raising Average Selling Prices||6||5||2||-1||0||2||8|
|Firms Raising Worker Compensation||26||21||25||22||24||23||21|