Tuesday, October 13, 2020

Small Business Hiring Plans One Bright Spot In September NFIB Optimism Survey

The National Federation of Independent Business (NFIB) reported a 3.8 point increase in the September Small Business Optimism Index. The Index level rose to 104.0, an optimism level above that reached in the beginning of the prior two recessions. The report notes nine of the ten Index components improved with one declining, the expected credit conditions category.

As I have written in the recent past, one area of this economic recovery that needs to see further improvement is the job market. Small businesses are the job creators and importantly as seen in the below chart, the September survey results show 23% of firms are planning to increase employment. This is near the 2019 high of 26% and sharply off the 1% low reached in April. Additionally, 36% of independent small businesses are reporting difficulty filling open positions. These are a couple of signs the job market is healing.

So long as state economies continue to reopen, small businesses seem to be in a position to drive further economic growth. Critically, the virus mandated shutdowns need to see further easing.

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