WASHINGTON (1/13/16)--Small-business owner optimism improved in December, according to the National Federation of Independent Business’ (NFIB) monthly index, which climbed to 95.2 from 94.8 during the month (Economy.com Jan. 12).
While the gains failed to completely reverse the previous month’s 1.3-point drop, for the year the index averaged 96.2, up from 95.6 in 2014.
The first six months proved stronger than the second, however, with the first half of 2015 posting an average of 96.7 and the second half recording a 95.6 point average.
Furthermore, the downward trend may continue if the global marketplace continues to struggle.
“Confidence will be important in assessing the impact of the volatility in global financial markets in the U.S. economy,” said Ryan Sweet, Moody’s analyst. “So far, we believe the economic costs are small, but the collective psyche needs to hold up. … If sentiment falters, firms could alter hiring and firing plans along with cutting investment.”
Barry Sloane, chair and president/CEO of Newtek, The Small Business Authority, commented in a similar fashion after the release of the SB Authority Market Sentiment Survey, which revealed that just over half of business owners are optimistic about the U.S. economy moving forward.
“We wonder whether or not our independent business owners, if polled in January given current events including a significant decline in domestic global stock markets, would be quite as optimistic looking into 2016,” he said.
The NFIB report found that, in December, the share of firms planning to expand employment climbed to 15% from 11%, though employers said they continue to have difficulty in finding skilled employees.
Additionally, a net 20% said they plan to raise compensation in the next three months, which “points toward stronger gains in wage growth,” Sweet said.
Additional numbers from the NFIB:
“All told, inflation pressure remains tame,” Sweet said.