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.”