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Small Improvement in Small Business Optimism, But Large Positive Labor Market Signs

Insights | Small Improvement in Small Business Optimism, But Large Positive Labor Market Signs

Author: David Templeton, CFA, Principal & Portfolio Manager, HORAN

The March NFIB Small Business Optimism Index increased to 98.2 compared to the prior month reading of 95.8. The report notes seven of the 10 index components had improvements. However, the uncertainty component increased six points as business owners were more uncertain about whether this was a good time to expand and make capital expenditures.

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A positive in the report is centered around the labor market:

  • 22% of firms plan on increasing employment in the next three months.
  • 42% of owners reported job openings they were unable to fill, a record high.
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This positive labor component in the small business survey coincidences with the JOLTS release I wrote about last week. In that post, job openings of 7.4 million are approaching the peak job openings level of 7.5 million reached in 2018.  A declining trend in the uncertainty level seems to be one missing ingredient that could be the key to maintaining a robust economic/business reopening environment.


HORAN Capital Advisors, LLC is an SEC registered investment advisor. The information herein has been obtained from sources believed to be reliable but we cannot assure its accuracy or completeness. Neither the information nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Any reference to past performance is not to be implied or construed as a guarantee of future results. Market conditions can vary widely over time and there is always the potential of losing money when investing in securities. HCA and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only and is not intended to provide and should not be relied on for tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.