The National Federation of Independent Business, Small Business Optimism Index dropped in December for the fourth time in a row. The bulk of the drop was in expectations for the economy, likely reflecting fallout from the stock market selloff, noted analysts at Wells Fargo.
Key Quotes:
“The National Federation of Independent Business (NFIB) Small Business Optimism Index fell 0.4 points in December to 104.4, marking the fourth consecutive monthly drop. The bulk of December’s pullback came from the share of business owners expecting the economy to improve over the next six months, which fell six points to 16%. Expectations for economic growth is the component that seems most susceptible to concerns about the sustained selloff on Wall Street. The index plunged 11 percentage points in November, likely reflecting the selloff that began in early October.”
“With optimism about the economic outlook fading, fewer business feel that now is a good time to expand. The share of firms stating that the next three months would be a good time to expand fell five points in December and is down a total of nine points since September. While this index has fallen from its recent highs, a fairly high proportion of businesses continue to feel that the next three months is a good time to expand their business, and this is evident in most of the key components of the NFIB survey.”
“The modest pullback in the NFIB index since it hit its all-time peak in August likely also reflects displeasure with the Federal Reserve’s continued rate hikes.”
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