22 April 2019

US Small Business Optimism Declines In June

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The NFIB index of US small business optimism declined to 93.5 in June after a report of 94.4 in May. 

The consensus was expecting an increase to 94.9.  This print puts the 2nd Quarter average at 93.3, a solid improvement from the Q1 average of 89.7, and the strongest reading since Q2 of last year. Despite the headline decline, however, some of the underlying details were more positive.

The net percentage of respondents planning to increase employment rose by 2 percentage points to 7%, and the percentage expecting the economy to improve rose by 1 percentage point to -4%. 

The decline was driven largely by inventories. The percentage of respondents with plans to increase inventories declined to -1% (previous: 3%) while those reporting current inventories were “too low” declined to -2% (previous: 1%). Together, those two inventory questions were responsible for about 70% of the headline drop. In all, while this report took slightly softer tone than last month, smoothing through the volatility suggests a broadly upward trend so far in 2013.
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