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US small business confidence edges up, sales a worry
[WASHINGTON] US small business confidence rose marginally in September as stock market volatility raised concerns about sales growth, suggesting the economy was expanding at a moderate pace.
The National Federation of Independent Business said on Tuesday its Small Business Optimism Index gained 0.2 point to 96.1 last month. It said that level was consistent with a 2.5 per cent annualized growth rate.
"Financial markets did not provide any encouragement to owners, instead providing volatility that only a trader could like. This produces uncertainty," the NFIB said.
Seven of the index's 10 components eked out small gains last month, while the share of small business owners expecting stronger sales volumes in the next few months fell six points.
While there were minor declines in labor market indicators, they remained at historically strong levels and the NFIB said actual reported employment was "very" strong. The government reported earlier this month that the economy added 142,000 jobs in September after creating only 136,000 positions in August.
Even as small business owners worried about sales growth, they were upbeat about business conditions over the next six months and profits. They also believed now was a good time to expand. There was a slight increase in the share of owners planning to increase inventory.
The survey continued to point to tame inflation pressures in the near term. Fifteen per cent of small business owners reported reducing their average selling prices in the past three months, up one point from August. A net 15 per cent planned to raise prices, unchanged from August.
Twenty-three per cent of owners reported raising worker compensation, unchanged from August and 2 points below the expansion high reading reached in January and May. The share planning to increase compensation rose 3 points to 16 per cent.