US NFIB Survey: September Optimism Index -2.3 to 103 - Text

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

of Independent Business' monthly Small Business Optimism index published

Tuesday:

     The NFIB Index of Small Business Optimism tumbled in September from 105.3

to 103 led by a steep drop in sales expectations, not just in hurricane-affected

states, but across the country.

     "The temptation is to blame the decline on the hurricanes in Texas and

Florida, but that is not consistent with our data," said Juanita Duggan, NFIB

President and CEO. "Small business owners across the country were measurably

less enthusiastic last month."

     The net percent of small business owners who expect improved sales in the

next three months plunged 12 points to a net 15 percent. Owners who think that

it's a good time to expand dropped 10 points. Also within the Index, expected

better business conditions   (-6) and capital expenditure plans (-5) retreated

in September.

     "The drop-off was consistent around the country regardless of region, and

it's likely that members in Florida and Texas were underrepresented in this

survey because of the obvious disruptions," said NFIB Chief Economist Bill

Dunkelberg. "The adjusted average employment change per firm dipped to -0.17,

which is a significant drop in hiring activity.

     "The Index remains very high by historical standards," he continued. "Small

business owners still expect policy changes from Washington on health care and

taxes, and while they don't know what those changes will look like, they expect

them to be an improvement. But the frothy expectations they've had in the

previous few months clearly slipped in September."

     Six of the 10 Index components dropped in September. Three improved, and

one remained unchanged. The bright spot last month was inventory plans, which

gained five points as more business owners anticipate a strong 4th quarter.

     Optimism Components:        Seas Adj Level %         Change

     PLAN TO INCREASE EMPLOYMENT       19                 1

     PLAN TO INCREASE CAP. OUTLAYS     27                -5

     PLAN TO INCREASE INVENTORIES       7                 5

     EXPECT ECONOMY TO IMPROVE         30                -1

     EXPECT REAL SALES HIGHER          15                -12

     CURRENT INVENTORY                 -3                 2

     CURRENT JOB OPENINGS              30                -1

     EXPECT CREDIT CONDITIONS          -4                -1

     NOW A GOOD TIME TO EXPAND         17                -10

     EARNINGS TRENDS                  -11                 0

     TOTAL CHANGE                      --                -27

--MNI Washington Bureau; +1 212-800-8517; email: sara.haire@marketnews.com

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