Small Business Optimism at Post-Recession High

The single most visible increase in the index components for April came in the number of business owners who say they expect the economy to improve. That number rose nine points in April.

The NFIB’s chief economist said:

[T]he Index is still 5 points below the average reading from 1973 to 2008, and far from what is considered expansion levels. This reading can only be characterized as a high end recession reading. Small business confidence rising is always a good thing, but it’s tough to be excited by meager growth in an otherwise tepid economy.

The NFIB reports that 24% of business owners currently have positions open that they are unable to fill and that 41% said there were few or no qualified applicants for the open positions.

One promising note was struck in the wages area. On a seasonally adjusted basis, a net 23% of small businesses reported paying higher compensation, the same as last month and among the best readings since 2008. A net 14% of business owners plan to raise compensation in the next few months, the same as the February and March reports.

The NFIB also notes, “The reported gains in compensation are now solidly in the range typical of an economy with solid growth.”

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