NFIB: Small Business Survey: "Small Business Owners Deeply Uncertain About Future"

The latest issue of the NFIB Small Business Economic Trends is came out this morning. The headline number for September came in at 94.1, down 0.3 from the previous month's 94.4. The index is at the 21st percentile in this series. Today's number came in below the forecast of 95.2.

Here is an excerpt from the opening summary of the news release.

The net percent of small business owners who expect better business conditions in the next six months jumped 12 points last month, according to the NFIB Small Business Economic Trends Report (SBET), released today, but that gain was erased by significantly weaker inventories and hard-to-fill job openings.

According to NFIB Chief Economist Bill Dunkelberg, small business owners won’t be hiring or building inventories – both of which signify confidence in the economy – until something changes in Washington.

“It is quite clear that the top issues for small-business owners will not be addressed this year,” said Dunkelberg. “The presidential election is so divisive that it offers little promise of a bipartisan effort to deal with any of these important issues.”

The first chart below highlights the 1986 baseline level of 100 and includes some labels to help us visualize that dramatic change in small-business sentiment that accompanied the Great Financial Crisis. Compare, for example the relative resilience of the index during the 2000-2003 collapse of the Tech Bubble with the far weaker readings following the Great Recession that ended in June 2009.

NFIB Optimism Index

Here is a closer look at the indicator since the turn of the century. The post-recession interim high of 100.4 occurred in December 2014.

NFIB Optimism Index Since 2000

The average monthly change in this indicator is 1.3 points. To smooth out the noise of volatility, here is a 3-month moving average of the Optimism Index along with the monthly values, shown as dots.

NFIB Optimism Index Moving Average