Small business optimism ticks up in September

Wells Fargo Research Team Wells Fargo

Summary

Economic woes and high uncertainty dent small business outlooks

Small businesses owners remain fairly downbeat on the economy. The NFIB Small Business Optimism index rose 0.3 point to 91.5 in September. Although the outlook for business conditions has improved significantly over the past few months, so has economic uncertainty. The uncertainty index capturing the share of firms answering "don't know" or "uncertain" to at least six questions jumped to its highest level on record dating back to 1987. The upcoming election is certainly a large influence, however a number of economic factors are also playing a role. Sales, capital expenditures and inventory investment all weakened in September. Although looser labor market conditions are improving the availability of workers and reducing compensation pressures, job openings continue to decline on trend. On the upside, the descent in hiring plans seems to have stalled, remaining essentially unchanged over the past five months. NFIB survey responses also remain consistent with downward-trending inflation.

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Wells Fargo Research Team

Wells Fargo

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