Small businesses were slightly more optimistic in August than in July as the National Federation of Independent Business' Small Business Optimism Index gained to 95.9 from 95.4.
"The index of Small Business Optimism went nowhere in August, so the good news is it did not fall," NFIB Chief Economist William Dunkelberg said. "Small business owners did not seem to be very concerned about the antics of the stock market or China's currency devaluation. Maybe it was too late in the month to be fully captured by the survey so more might be revealed in September, but most small business owners have their capital primarily invested in their own firm, not other people's firms."
Five of the index components posted gains, three fell and two remained unchanged: job openings and earning trends, each posted a 4 point gain, but there was not much action in the remaining eight components.
Only a net 1 percent of owners reported raising prices while employee compensation remained at expansion high levels. Hiring, capital spending and inventory investment plans remained basically unchanged, collectively adding 2 points. The two outlook components collectively declined 4 points showing no optimism about future business conditions or expansion opportunities.
The index reading of 95.9 was again well below the 42 year average and is consistent with reported economic growth of about two percent for the first half of the year.
"Clearly, from Main Street, there is no basis to expect a dramatic second half growth as July and August are already unimpressive," Dunkelberg continued. "Washington continues to make no progress dealing with the issues most important to small business owners and there is little hope that this Administration will ever take any action."
