Small Business Optimism Continues Momentum

Wells Fargo Research Team Wells Fargo

Small Business Optimism rose 0.7 points to 107.6 in February, the second-highest reading in series history. Capital spending and rising compensation were bright spots in the report and indicate growth.

Small Businesses Ready to Grow

The National Federation of Independent Business (NFIB) Small Business Optimism Index rose 0.7 points to 107.6 in February. Strength was seen broadly across components of the index.
Capital spending outlays were reported by 66 percent of owners, the highest reading since 2004. Reports of increased compensation remained near a series high of 31 percent. These categories suggest owners are investing in their own growth.

Taxes vs. Quality of Labor

The newly-enacted tax policy has eased the burden of taxes on small business owners. The percent of owners reporting taxes as the most important problem plummeted 4 points to 15, the lowest level since 2006, and is no longer the most pressing issue.
Labor quality is now the largest issue for small business owners. The tight labor market has held back hiring. Difficulty finding and retaining quality workers has led to rising compensation.

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Wells Fargo Research Team

Wells Fargo

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