Small Business Confidence Rises a Little

The National Federation of Independent Business (NFIB) today released its monthly report on small business confidence in December, which showed business confidence rising by 1.8% to an index reading of 93.8. The slight gain represents the fourth consecutive month of rising confidence, a sign that perhaps improvements in the US economy will last this time.

The NFIB’s chief economist said:

Much of December’s gain resulted from the fact that concerns about business conditions over the next six months have subsided and because many small-business owners have improved their expectations for real sales gains in the coming months. But make no mistake: the economic winter is still here. Similar gains in the early part of 2011 quickly faded, and the Index is still well below where it should be at this point in the recovery. The economy appears to be slowly recovering, resolving imbalances in debt, housing and the like. But, it is unlikely that growth will be much better than 2011 even with a solid fourth quarter GDP growth.

The number of firms with down-trending sales decreased in December, but the total of firms with lower sales continues to be higher than the number of firms experiencing improved sales. Only a net 6% of business owners surveyed expect to increase hiring over the next three months.