Econoday Economic Report: NFIB Small Business Optimism Index July 12, 2011

2011 Economic Calendar

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NFIB Small Business Optimism Index

Released On 7/12/2011 7:30:00 AM For Jun, 2011

	Prior	Actual
level	90.9	90.8

Highlights
The political drumbeat continues from the National Federation of Independent Business whose text for June declares: "Small-business owners are registering a vote of 'no confidence' in the federal government." It uses the word "grave" to describe small-business concern over the federal budget and asks: "Who can blame the prevalence of pessimism when administration officials are telling Congress that small businesses need to pay more in taxes to support government spending programs?"

Now their numbers. Their index slipped one tenth in June to 90.8 in what the text describes as recession territory. The weakest readings concern the outlook for the economy and the outlook for sales. Interestingly, strength appears in employment plans. Also there's evidence of pricing power with a net 10 percent of the sample raising their selling prices over the last three months. It also notes that access to credit is only a limited problem.

Definition
The small business optimism index is compiled from a survey that is conducted each month by the National Federation of Independent Business (NFIB) of its members. The index is a composite of ten seasonally adjusted components based on questions on the following: plans to increase employment, plans to make capital outlays, plans to increase inventories, expect economy to improve, expect real sales higher, current inventory, current job opening, expected credit conditions, now a good time to expand, and earnings trend. The baseline of 100 is for the average of the year 1986. A positive percentage change indicates improvement while a negative percentage change in the index suggests a decline in optimism. But the level indicates optimism relative to 1986—a moderately healthy year for economic growth with annual average GDP growth at 3.5 percent. Why Investors Care

2011 Release Schedule

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