National Federation of Independent Business Survey

TRADEX GLOBAL INTERNAL COMMENTARY

The National Federation of Independent Business’s optimism index fell slightly in September to 92.8 from 92.9.  This is the fourth decline in five months.  It shows that business leaders are delaying any expansion until there is more clarity in tax and regulatory policy.  It is becoming extremely difficult to do business in the United States! Hiring is not improving and this measure fell 6 percentage points to a net 4%.  The number of respondents who expected higher sales held at 1%.  Respondents said the biggest problem facing small businesses was the rising cost of health care and insurance, energy costs and government policy.  The NFIB report was based on 691 small business owners, and small business owners represent 99% percent of all US employers.  A small business is defined as an independent enterprise with no more than 500 employees.  We believe that this segment of the economy gives the most accurate picture of what is happening on Main Street.  The report was not very strong…In the 39th month of a real recovery, we should be seeing much stronger reports.  Keep nimble; we are increasing hedges for October – Michael Beattie

EXTERNAL RESEARCH COMMENTARY

Confidence among U.S. small businesses cooled in September as fewer companies said they planned to hire or invest in new equipment, a survey found. The National Federation of Independent Business’s optimism index fell to 92.8 from an August reading of 92.9. Four of the 10 components that make up the gauge decreased, the Washington- based group said. The fourth decline in the past five months for the measure showed business leaders may be putting off some of their hiring and investment decisions because of a lack of clarity on tax and regulatory policy. At the same time, more companies expected better economic conditions in six months, signaling a pickup in sales and employment may take time to develop.

Small-business “owners are in maintenance mode; spending only where necessary and not hiring,” William Dunkelberg, the group’s chief economist, said in a statement. “Owners are unwilling to put their own capital on the line until the future path of the economy and economic policy becomes clear.”

A measure of whether business owners plan to add more workers fell by six percentage points to a net 4 percent. The number of respondents who said they planned to invest in equipment dropped three points to a net 21 percent in September. The world’s largest economy added 114,000 workers last month, the fewest since June, according to a Labor Department report on Oct. 5. The jobless rate dropped to 7.8 percent after exceeding 8 percent for 43 straight months.

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