December 2017 NFIB
Submitted by Atlas Indicators Investment Advisors on January 14th, 2018
Winter temperature weren’t the only things cooling off as last year came to a close. The December 2017 reading of the National Federation of Independent Business (NFIB) small business optimism index shed some of its recent heat as well. Fortunately, the cooling was more like that of Southern California and not the East.
After setting a record of 107.9 in November 2017, the NFIB tally fell to 104.9. While the tally remained near record levels, half of the components worsened in the period. Those expecting the economy to improve declined more than any other category. Plans to add to inventories dropped as well as did the number of owners anticipating better sales. Additionally, fewer intend to increase payrolls, and earnings trends worsened. Three components (current inventories, expected credit conditions, and now a good time to expand) were unchanged.
Just two categories improved, and their increases were marginal. Plans to make capital outlays rose 1.0 percent. The number of small businesses with job openings matched that uptick. Interestingly, smaller firms are reporting labor shortages.
Despite December’s setback, 2017 was a strong year for this indicator. After the presidential election in 2016, the NFIB moved forward rapidly and maintained an upward trend thereafter. For right now, its level is encouraging and suggests the current expansion is firmly footed.
