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NFIB Oct Small-Business Optimism Index 87.5 Vs 92.9 In Sep

   By Michael S. Derby 
   Of DOW JONES NEWSWIRES 
 

NEW YORK (Dow Jones)--U.S. small-business operators reported widespread gloom in October, according to a survey released Tuesday.

The National Federation of Independent Business said that its index of small-business optimism hit its third-lowest reading in 35 years last month, coming in at 87.5 from 92.9 in September.

The overall index was dragged down by pessimism over the creation of new jobs and capital spending. The index showed broad-based worries about the economy and future sales levels.

October's findings are "not a pretty picture" and are "a clear indication that the economy is solidly lodged in a recessionary mire," the report said.

The NFIB survey continued to find that the credit crisis remains a bit of a mixed bag for small companies. The report noted there had not been "much change" on this front and that while it was less difficult to get a loan, demand for credit was down and only 5% of respondents even rated getting financing as their top concern.

When it came to hiring, the story was grim. The NFIB found less than half of firms trying to add to staffs, and of those that attempted to do so three quarters struggled to find acceptable workers.

Looking down the road, only 9% of companies plan to create new jobs and 15% plan to cull payrolls. The dark employment situation was spread across most of the nation, the report said.

One bright spot in the report was the fate of price pressures. The NFIB report said inflation gains continue to "abate" in the face of recession-like sales trends. While it is still a "high" reading, the net percentage of firms reporting higher selling prices fell by five points to 15% of respondents in October.

"Price stability is still some distance away at the core level," which strips out food and energy factors, the report said. However, "falling gas prices will ... bring relief to the headline [consumer price index] inflation measure," it said.

The NFIB survey began in 1973, and it is closely watched given its broad-based canvassing of small-business operators.

   -By Michael S. Derby; Dow Jones Newswires, 201-938-4192 
   michael.derby@dowjones.com 
 

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(END) Dow Jones Newswires

November 11, 2008 07:30 ET (12:30 GMT)


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