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Tuesday, June 09, 2020

Small Business Optimism Increased in May, "Bad news for job creation"

by Calculated Risk on 6/09/2020 08:22:00 AM

Most of this survey is noise, but there is some information, especially on the labor market.

From the National Federation of Independent Business (NFIB): May 2020 Report

The Small Business Optimism Index increased 3.5 points in May to 94.4, a strong improvement from April’s 90.9 reading. Eight of the 10 Index components improved in May and two declined. The NFIB Uncertainty Index increased seven points to 82. Reports of expected business conditions in the next six months increased 5 points to a net 34%, following a 24-point increase in April. Owners are optimistic about future business conditions and expect the recession to be short-lived.
May Survey respondents reduced employment by 0.17 workers per firm in the prior three months, down from an addition of 0.09 workers per firm in the April report. … May’s survey was bad news for job creation. A seasonally-adjusted net 8 percent plan to create new jobs, up 7 points.
emphasis added
Note that the "single biggest problem" is "poor sales".

Small Business Optimism IndexClick on graph for larger image.

This graph shows the small business optimism index since 1986.

The index increased to 94.4 in May.