Economic Snapshot: Small business optimism remains below 42-year average

Small business optimism is continuing to increase month-to-month, albeit still below the 42-year average for the index.

Small business optimism

The NFIB Small Business Optimism Index increased 0.2 points in September to 96.1, following a gain of 0.5 points in August. The index remains below the 42-year average of 98.

Owners added a net 0.18 workers per firm in recent months, which is up from 0.05 in August and is now at its best level of the year. Fifty-three percent of owners reported hiring or trying to hire, down 3 points, but 45 percent reported few or no qualified applicants for the positions they were trying to fill. Twenty-seven percent of all owners reported job openings they could not fill in the current period, down 2 points from the highest reading for this year.

Fifty-eight percent of owners reported capital outlays, unchanged from August. Seven percent acquired new buildings or land for expansion, unchanged from the previous month, and 14 percent spent money for new fixtures and furniture, up 1 point. The percent of owners planning capital outlays in the next 3 to 6 months gained 1 point to 25 percent. Of the 51 percent of owners who said it was not a good time to expand, 22 percent blamed the political environment – up 2 points.

Seasonally adjusted, the net percent expecting better business conditions increased 2 points to a net negative 4 percent. The seasonally adjusted net percent expecting higher real sales fell 6 points to a net 1 percent of all owners.

Consumer Price Index

The Consumer Price Index for All Urban Consumers (CPI-U) decreased 0.2 percent in September on a seasonally adjusted basis. Over the last 12 months, the all items index was essentially unchanged before seasonal adjustment.

The energy index fell 4.7 percent this month with all major components declining/ The gasoline index continued a sharp decline and was the main cause of the seasonally adjusted all items decrease. The indexes for fuel oil, electricity and natural gas declined as well.

The indexes for food and for all items less food and energy both increased in September. The food index rose 0.4 percent, the largest increase since May 2014, and the index for all items less food and energy rose 0.2 percent.

The indexes for shelter, medical care, household furnishings and operations, and personal care all increased. The indexes for apparel, used cars and trucks, new vehicles, and airline declined.