US small business sentiment ticks higher in April - NFIB
Small business sentiment in the US improved a touch in April, driven by reports of improved profits, according to the latest survey from the National Federation of Independent Business.
The small business optimism index ticked up to 104.8 from 104.7 in March, beating expectations for a reading of 104.5.
There was a big jump in the index of expected profit trends, which hit its highest level in the survey's 45-year history.
NFIB president and chief executive officer Juanita Duggan said: "Never in the history of this survey have we seen profit trends so high. The optimism small businesses owners have about the economy is turning into new job creation, increased wages and benefits, and investment."
Meanwhile, NFIB chief economist Bill Dunkelberg said there is no question small business is booming.
"Consumer spending, the new tax law, and lower regulatory barriers are all supporting the surge in optimism across all small business industry sectors," he said.
The index for job creation plans fell four points but the index for capital expenditure plans was up three points, while the sales expectations index increased by one point.
Ian Shepherdson, chief economist at Pantheon Macroeconomics, said: "The four-point drop in hiring intentions, reported last week - the day before the payroll report, as usual - coupled with the impact of the drop in stock prices, pointed to a weaker NFIB headline, so this is a positive result. The most stock-sensitive components of the NFIB - expectations for the economy, business sales, and earnings - were little changed; we feared clear declines.
"But the big news in the survey is the three-point rebound in capex intentions, reversing the unexpected and alarming drop in March. This still leaves the index three points lower than its pre-hurricane peak, but it's a big step in the right direction. With earnings strong, staff hard to find, and credit still easily available, capex plans ought to be strong. The March drop looks like a knee-jerk reaction to the drop in stock prices in February, but we still want to see a further recovery. For now, though, the April rebound is good news. On the inflation front, the selling price expectations index dipped two points to 14, still consistent with higher inflation over the next year but nothing alarming."