NFIB optimism index ticks up in February but misses expectations

Small business sentiment in the US improved less than expected in February, according to the National Federation of Independent Business.

The small business optimism index rose to 101.7 from January's two-year low of 101.2 but was below consensus expectations for a reading of 102.5.

"Small business owners are thankful to have the government shutdown in the rear view mirror but need more certainty about the future," said NFIB president and chief executive Juanita D. Duggan.

"Small businesses put their money where their expectations are as we’ve seen when they get tax and regulatory relief. The best thing Washington can do for the small business half of the economy is to continue the policies - tax cuts and deregulation - that leave them with more resources to invest and find qualified workers.”

NFIB chief economist Bill Dunkelberg said business owners still want to grow and expect they could sell more if they could hire employees to produce more.

"Small businesses want to expand in this growing economy but only if they can find qualified applicants for their open positions. On the positive side, now that the government is funded, owners should be getting back to business with the rebound in consumer sentiment."

Ian Shepherdson, chief economist at Pantheon Macroeconomics, said: "We hoped for a bigger rebound on the back of the recovery in the stock market, but at least the index is no longer falling.

"Economic expectations, the component most sensitive to stocks, rose five points to 11 - it was at 33 in September - but this was mostly offset by a four-point dip in earnings expectations, which might reflect fears over accelerating wage costs. The key labour market numbers in the survey dipped a bit but remain very strong; note these data are not new; they were published last week, ahead of the payroll report, as usual."