A Hint of Small-Business Optimism

The National Federation of Independent Businesses released its Small Business Economic Trends report earlier this week. This optimism index, as it is sometimes called, is showing more optimism, although it is still at historically rather low levels. But the improving direction is important. It increased 1.8 points to 92.0 and the improvement, while small, was widespread among the components of the report and, importantly, the forward-looking components posted solid gains.

The improvement is welcome and I personally like this particular measure because small businesses are a good barometer of the U.S. economy. Unlike companies in the S&P 500, which derive around 44% of their sales from abroad, small companies are tied to the health of the economy here at home, though some are exporters or suppliers to exporters  Importantly, small business owners are arguably much more connected to their end customers than CEOs of large companies might be. And changes in sentiment of small business owners can give us a perhaps more accurate and timely read on where the domestic economy is headed....562 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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