| NFIB Small Business Optimism Index |
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Released On 1/10/2012 7:30:00 AM For Dec, 2011
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Prior | Actual |
| level | 92.0 | 93.8 |
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Highlights
Optimism is on the rise at the nation's small businesses where, at 93.8 in December, the NFIB index rose for a fourth straight month and rose by 1.8 points for a second straight month. Gains are centered in earnings, sales expectations, and expectations for economic improvement. On the jobs front, a net six percent of small business owners are planning to create new jobs which, next only to November, is the second highest level of the recovery. Plans for capital outlays are also up, and the sample, in contrast to restrictive lending conditions in the housing sector, ranks access to credit as their least concern. Though optimism is improving, the level of the overall index, at 93.8, still remains in sub-100 recession territory.
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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
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