With all of the publicity surrounding struggling small businesses throughout America, it was somewhat surprising to see the NFIB’s Small Business Optimism Index back above 100 for August. The consensus of analysts had been for a reading of 99.0, and the Index came in at 100.2. This is the second time the Index has surpassed 100 since February, with the Index diving sharply in March and April due to COVID-19 concerns and shutdowns.
The NFIB reported,
Source: NFIB, Statista
When the 10 internal components measured in the August report are examined, the three areas that improved the most were “plans to increase employment,” “now is a good time to expand,” and “earnings trends.” That said, the “earnings trends” component was still well into negative territory. It is interesting to note that the two slightly negative components were both in the area of future expectations: “expect economy to improve” and “expect real sales higher.”
Bespoke Investment Group provided thoughts last week on another internal component of the report, “actual sales changes,” where they found encouraging signs:
Source: Bespoke Investment Group, NFIB
When the small businesses surveyed by NFIB were asked what their single most important problem currently was, “poor sales” ranked in the top three concerns, but, notably, was not the leading concern. “Quality of labor” and “taxes” ranked higher as current concerns.
Source: NFIB, Statista
In a press release issued Aug. 18 that focused more on middle-market companies than small businesses—but also addressed broader economic issues—the U.S. Chamber of Commerce had strong remarks on the stakes for future economic growth amid the pandemic:
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