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Small Business Optimism Index 94.6 Vs 94.4 In Nov

Tuesday, January 8, 2008

NFIB Dec Small Business Optimism Index 94.6 Vs 94.4 In Nov

NEW YORK (Dow Jones)--Small businesses in the U.S. were slightly more optimistic in December than in November, according to a survey of 670 firms compiled by the National Federation of Independent Businesses.

The association's index of small business optimism edged up to 94.6 in December, remaining at its lowest level since March 2003. It stood at 94.4 in November, the association said in a press release. The index has lost 2.4 points since September.

Capital spending plans have improved since September, while job creation plans were unchanged but at a weak level. Two index components - expected business conditions in six months and expected real sales - contributed the most to the declines in the optimism index since September.

"For the most part, the decline in the index is a 'recession' in expectations, coupled with a decline in labor market activity that would be expected when the economic outlook deteriorates," the association said in a press release.

Of the 10 components that make up the index, three decreased, three were flat and four posted increases in December from November.

The association said job creation plans were positive in all industry groups except agriculture and construction in December. Professional service firms reported the strongest job creation plans. By region, job creation plans were the weakest in the east- north-central States, which include Ohio and Michigan, two states with very high property foreclosure rates, the association said.

On inflation, the association said 26% of all respondents in December plan to raise prices, up from 21% in September. "The historic relationship between inflation and the percent of owners reporting higher prices suggests that inflation will be showing some new, unwanted, vitality," the association added.

-By Madeleine Lim

Posted by MOHAMED SAID at 5:52 AM  


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