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Small US businesses see improved sentiment in November
SENTIMENT among small US businesses climbed by the most in more than a year as more owners said that profit trends are looking up and that it is a favourable time for expansion, adding to signs that a key part of the economy is holding up in the fourth quarter.
The National Federation of Independent Business (NFIB) optimism index rose 2.3 points in November to a four-month high of 104.7, topping all estimates in a Bloomberg survey of economists that had called for 103.
The composition of the report released on Tuesday showed that earnings trends were the biggest driver of the gain, posting the biggest increase in almost two years, though the overall rise was broad-based as seven of 10 components advanced.
The second straight gain follows Friday's unexpectedly strong November jobs report, and is the latest sign that the world's largest economy will avoid a major stumble in the final three months of this year.
Views on whether it is a good time for expansion were a big driver of the gain, with that measure rising to the second-highest reading of this year. Hiring plans also gave a boost as 61 per cent of respondents reported hiring or trying to hire, an increase of one percentage point, though 53 per cent reported few or no qualified applicants for the positions they were trying to fill.
"Overall, the Main Street economic machine continued to push the economy forward," NFIB chief economist William Dunkelberg and director of Research and Policy Analysis Holly Wade wrote in the report.
Plans to increase inventories and sales expectations were the only two categories to post weaker readings. Expected credit conditions were unchanged. BLOOMBERG