| NFIB Small Business Optimism Index |
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Released On 5/8/2012 7:30:00 AM For Apr, 2012
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Prior | Consensus | Consensus Range | Actual |
| level | 92.5 | 93.0 | 91.5 to 94.8 | 94.5 |
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Highlights
Small business optimism jumped two points in April to 94.5 for the best reading in a year. Job creation plans and job openings both increased and capital spending plans are up. Small businesses are also reporting the best sales trends of the recovery and they see big improvement in profit trends. The wide improvement in this report points to rising economic momentum and contrasts with the recent run of other economic news which has been no better than mixed.
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Market Consensus before announcement
The NFIB Small Business Optimism Index in March declined 1.8 points to 92.5. Declines sweep nine of the report's 10 index components including employment plans, sales expectations, and earnings trends. On the positive side, ongoing hiring was solid and access to credit was not a major concern.
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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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