The NFIB Small Business Optimism Index rose 1.3 points to 95.4 in July after dropping more than 4 points in June. Expectations for business conditions and real sales gains accounted for half of the net gain in the Index components.
"The best that can be said about the July index is that there was no further decline from June," said NFIB Chief Economist Bill Dunkelberg.
Job creation was flat in July. On balance, owners added a net 0.05 workers per firm in recent months, better than June’s -0.01 reading, but still close to the zero line. Fifty-seven percent reported hiring or trying to hire (up 5 points), but 48 percent reported few or no qualified applicants for the positions they were trying to fill.
Sixty-one percent reported capital outlays, up 3 points on top of a 4-point gain in June. Overall, a nice pickup in the frequency of spending reports. The percent of owners planning capital outlays in the next three to six months rose 1 point to 24 percent, not a strong reading historically but among the better in this expansion.
Earnings trends continued to deteriorate, posting a 2-point decline after a 10 point drop in June, falling to a negative 19 percent. Far more owners reporting profits lower quarter to quarter than higher.