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  • U.S. small business optimism improves noticeably in July, hitting a nearly 2.5-year high, - NFIB report shows
Economic news
13.08.2024

U.S. small business optimism improves noticeably in July, hitting a nearly 2.5-year high, - NFIB report shows

The National Federation of Independent Business (NFIB) announced on Tuesday its Small Business Optimism Index climbed by 2.2 points to 93.7 in July, following a 1.0-point increase in the previous month. This marked the fourth straight rise in the indicator, which lifted it to the highest level since February 2022 (95.7). Nonetheless, the Small Business Optimism Index remained below its historical average of 98 for the 31st consecutive month.

Economists had expected the index to edge up to 91.7 in July.

According to the report, the July jump in the headline gauge was due to increases in 5 components, driven by a measure of small business owners expecting the improvement in the economy (+18 points) and a measure of small business owners expecting real sales to be higher (+4 points). These gains, however, were partly offset by decreases in such 3 indicators, as a measure of small business owners viewing current inventory stocks as “too low” (-2 points) and a measure of small business owners reporting positive profit trends (-1 point). Meanwhile, the remaining 3 components were unchanged.

Commenting on the latest data, Bill Dunkelberg, NFIB Chief Economist, said that, despite the increase in optimism, the road ahead remains tough for the nation’s small business owners. “Cost pressures, especially labour costs, continue to plague small business operations, impacting their bottom line,” he added. “Owners are heading towards unpredictable months ahead, not knowing how future economic conditions or government policies will impact them.”

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