U.S. NFIB Small Business Optimism Index Rises in March

• The NFIB Small Business Optimism Index rose 2.4 points in March to 98.2.

• The March reading returns to the historic average since last November.

The National Federation of Independent Business (NFIB) reported that its Small Business Optimism Index improved to 98.2 in March, up from 95.8 during February. The NFIB release stated that "March's reading is the first return to the average historical reading since last November".

An improved net -8% of respondents felt that the economy would improve, better than February's -19%. A net even percent of firms expected higher real sales in March, an improvement from the -8% in February. Earnings trends over the past three months declined four points to a net negative 15%.

A net 11% of firms thought that now was a good time to expand, close to the 13% twelve months ago. A net 22% of firms planned to increase employment, inching close the recent high of 23% last September. But 20% of owners reported capital outlays in the next three to six months, down three points from February.

Fifty-one percent of firms found few or no qualified candidates to fill job openings last month, unchanged from February and up from a low of 37% last May.

Credit was hard to get by a negligible one percent of respondents, the same reading since January.

Pricing power strengthened slightly, with a net 26% of firms raising prices in March from a net 25% in February. That remained up from the price deflation reported early last year. A net 28% of firms raised worker compensation in March, up from 25% in February.

Important issues for small businesses were lessened quality of labor (24%), finding eligible workers to fill open positions, and rising labor costs (7%).

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.