NFIB says US small business confidence 'strong', prices jump alongside
US small business confidence strengthened in July on the back of improved expectations for the economy.
The National Federation of Independent Business's confidence index increased from 99.6 to 102.5.
Economists had penciled in a reading of 99.5.
The sub-index for economic expectations saw the biggest rise, jumping by 14 points, although that simply reversed the "inexplicable plunge" seen in June, mused Ian Shepherdson, chief economist at Pantheon Macroeconomics.
Expectations for sales and earnings, inventories, hiring plans and employee compensation all rose alongside.
Regarding the latter two subindices, Shepherdson said: "Their message is clear; businesses can’t find all the people they want, and compensation costs are rising strongly."
Nevertheless, a dip in the corresponding sub-index denoted hesitancy among smaller firms when it came to outlays for capital expenditures, he added.
As well, a seven-point jump saw the sub-index for prices hit a record high, which Shepherdson labelled "disconcerting".
"The renewed increase, then, either is just a catch-up or, more ominously, a sign that respondents think the upward pressure on prices is likely to last longer. It’s too soon to say for sure, but it’s hard to see anything good in the numbers."