Optimism in small business around the U.S. saw an increase back in October. However, owners didn’t have so much cheer as they had to make the harsh plans to cut back inventory as well as trim their workforce. According to the National Federation of Independent Business, their small business index for October rose 2.7 points to 91.7 which rounded out the third straight monthly rise.
In a statement from the NFIB, they stated, “The index has been below 93 every month since January 2008 (34 months) and below 90 for 26 of those months, all readings typical of a weak or recession-mired economy.” In light of this, small business owners continued to liquidate inventories while weak sales trends didn’t give much reason to order new stock.
The NFIB also added, “Unless consumer spending picks up, the demand for new inventory will remain weak. As a result, inventory stocks at large manufacturers and importers may start to build as small business orders fail to pick up steam.”
Average employment growth per firm remained unchanged in October which was one of the best performances in years according to the NFIB. However, private sector growth is still very short of what it needs to be in order to decrease the unemployment rate.
The Labor Department put the jobless rate of the United States at 9.6% in October which, sadly, was unchanged from the month before. Payrolls of non-farms did rise by 151,000 which was the first gain since May and private hiring also rose by 159,000.
Only 8% of small business owners that were surveyed by the NFIB planned on increasing their employment from October through January. This number remained unchanged from the month of September. Of those surveyed, 13% planned on reducing their workforce which was also down 3 points from September.