Small Business Optimism Index Falls

Expectations are falling in consumer confidence readings and also some business readings including the small business optimism index which fell 1.3 points in November to 94.8. Components showing the most weakness relative to October are future sales followed by the economic outlook and earnings trends. But holding steady at solid levels are job openings, capital investment plans, and hiring plans which are all central positives for the economy. The Paris attack, together perhaps with the pending rate hike by the Fed, may behind the dip in the long-term outlook but the immediate outlook is holding up which is an important positive heading into the holiday spending season.

Recent History Of This Indicator:
The small business optimism index has been showing steady, moderate strength especially employment where hiring plans have been at their best levels of the year. And in a hint of wage pressures to come, small businesses have been reporting the most difficulty of the recovery in finding qualified employees. Capital outlays in this report have also been positive and point to building business optimism. The Econoday consensus is calling for a ready reading, with the November index consensus at 96.0 vs October's 96.1.