Small Business Confidence Hits Highest Level Since 2007, Redux
The collective outlook of U.S. small businesses picked up another positive notch in February, according to the latest survey conducted by the National Federation of Independent Businesses. The NFIB's Index of Small Business Optimism increased to 94.5 last month.
While that's only a 0.4-point bump from January, it marks the highest readout for the index since December 2007. Last month's number had likewise been the highest recorded in the previous three-plus years. The February index polled 774 NFIB-member businesses.
The news was particularly encouraging on the jobs front: Both current employment openings and future hiring plans made noticeable strides in February. A net 15 percent of respondents reported unfilled job openings, a two-point increase from the previous month. A net five percent of small employers intend to create new jobs during the next three months — also a two-point rise from January. The jobs data echoes the Intuit Small Business Employment Index, which recently reported modest hiring increases by smaller employers.
Inventories are also growing based on the newest NFIB numbers, with a net negative eight percent of owners indicating inventory growth — a two-point gain. The percentage of businesses that believe that economic conditions will be better six months from now dipped somewhat in February, however, shedding a point to a net positive nine percent.
The employment numbers were largely cause for some tempered enthusiasm from the NFIB. "This is not a reading that characterizes a strongly rebounding economy," said NFIB chief economist Bill Dunkelberg in a statement. "But it is the third best reading since the fourth quarter of 2009 when the economy was expanding rapidly. So, it gives us cause for some real optimism." That qualifies as downright bubbly compared with recent comments from the pro-business lobby.
There's a tortoise-and-hare analogy to be had here — the NFIB seems to agree, invoking the phrase "slow and steady" in its announcement — in the form of restrained but steady growth after several years of brutal business conditions. The NFIB's index, as one barometer, has gained in six of the last seventh months. The prudent bet appears to sit squarely on the shell of the tortoise.