US NFIB Survey: December Optimism Index -0.4 to 104.4 - Text

     WASHINGTON (MNI) - The following are excerpts from the National Federation

of Independent Business' monthly Small Business Optimism index published

Tuesday:

     The NFIB Small Business Optimism Index remained basically unchanged in

December, drifting down 0.4 points to 104.4, according to the report released

today. Unfilled jobs and the lack of qualified applicants continue to be a

primary driver, with job openings setting a record high and job creation plans

strengthening. Reports of higher worker compensation remained near record levels

and inventory investment plans surged. Expected real sales growth and expected

business conditions in the next six months, however, accounted for the modest

decline in the Index.

     "Optimism among small business owners continues to push record highs, but

they need workers to generate more sales, provide services, and complete

projects, said NFIB President and CEO Juanita D. Duggan. "Two of every three of

these new jobs are historically created by the small business half of the

economy, so it will be Main Street that will continue to drive economic growth."

     A recent historical perspective:

     Actual hiring strengthened to the highest reading in six months, job

openings are at a record high levels, and plans to create new jobs are down only

three points from August's record high. 

     The net percent of owners expecting better business conditions in six

months and the percent viewing the current period as a good time to expand have

both tapered off since the record high Index reading in August but still remain

well above their historical averages. 

     Actual capital outlays are five percentage points higher than in August,

although plans for outlays are eight points below the high for this expansion. 

     Plans to invest in inventories are only two points below August, the record

high. Satisfaction with inventories is two points better.

     Optimism Components:        Seas Adj Level %     Change

     PLANS TO INCREASE EMPLOYMENT      23                 1

     PLANT TO MAKE CAPITAL OUTLAYS     25                -4

     PLANS TO INCREASE INVENTORIES      8                 6

     EXPECT ECONOMY TO IMPROVE         16                -6

     EXPECT RETAIL SALES HIGHER        23                -1

     CURRENT INVENTORY                 -1                 4

     CURRENT JOB OPENINGS              39                 5

     EXPECTED CREDIT CONDITIONS        -6                -1

     NOW A GOOD TIME TO EXPAND         24                -5

     EARNINGS TRENDS                   -7                -3

--MNI Washington Bureau; tel: +1 202-371-2121; email: kevin.kastner@marketnews.com

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