US NFIB Survey: Oct Optimism Index -0.5 to 107.4 - Text

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

of Independent Business' monthly Small Business Optimism index published

Tuesday:

     Small business optimism continued its two-year streak of record highs,

according to the NFIB Small Business Optimism Index October reading of 107.4.

Overall, small businesses continue to support the three percent-plus growth of

the economy and add significant numbers of new workers to the employment pool.

Owners believe the current period is a good time to expand substantially, are

planning to invest in more inventory, and are reporting high sales figures.

     "For two years, small business owners have expressed record levels of

optimism and are proving to be a driving force in this rapidly growing economy,"

said NFIB President and CEO Juanita D. Duggan. "The October optimism index

further validates that when small businesses get tax relief and are freed from

regulatory shackles, they thrive and the whole economy prospers."

     Seasonally adjusted, 30 percent of owners think the current period is a

good time to expand substantially, citing the economy (72 percent) and strong

sales (14 percent). Nine percent of those who believe it is a good time to

expand cited the political climate with 17 percent who believe it is a "bad

time" to expand blaming politics. Although politics matter, the index indicates

that economic factors, good or bad, are the main drivers of expansion decisions.

     The net percent of owners planning to invest in more inventory rose two

points to a net five percent, the 21st positive month since January 2017. This

is due to the owners viewing current inventory stocks as "too low" falling to a

net negative two percent, historically a very "tight" condition. A net eight

percent of all owners (seasonally adjusted) reported higher nominal sales in the

past three months, unchanged from September.

     "Thanks to a number of factors, including the federal government's

loosening grip on the private sector, the U.S. regained the top spot in the

World Economic Forum's ranking as the most competitive country during the month

of October. An unburdened small business sector is truly great for employment

and the general economy," said NFIB Chief Economist Bill Dunkelberg. "October's

report sets the stage for solid economic and employment growth in the fourth

quarter, while inflation and interest rates remain historically tame. Small

businesses are moving the economy forward."

     Job creation remained solid in October for small businesses at a net

addition of 0.15 workers per firm, as reported in last week's NFIB monthly jobs

report. However, 38 percent of all owners reported job openings they could not

fill in the current period, equaling September's record high. Sixty percent of

owners reported hiring or trying to hire with 88 percent of them reporting few

or no qualified applicants for the positions they were trying to fill.

Thirty-four percent reported raising overall compensation in hopes of hiring and

retaining needed employees, only three points off from September's record high.

     Optimism Components:        Seas Adj Level %     Change

     PLANS TO INCREASE EMPLOYMENT      22                -1

     PLANT TO MAKE CAPITAL OUTLAYS     30                 0

     PLANS TO INCREASE INVENTORIES      5                 2

     EXPECT ECONOMY TO IMPROVE         33                 0

     EXPECT RETAIL SALES HIGHER        28                -1

     CURRENT INVENTORY                 -2                -1

     CURRENT JOB OPENINGS              38                 0

     EXPECTED CREDIT CONDITIONS        -5                 0

     NOW A GOOD TIME TO EXPAND         30                -3

     EARNINGS TRENDS                   -3                -2

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

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