Small Business Optimism Improves

Small business optimism improved in December, to 95.2 and, importantly, reflecting strength in job openings and plans to increase employment. Capital investment plans are also a top component. Showing the most month-to-month improvement are sales expectations. In the negative column, however, are earnings trends and expectations for the overall economy, the latter also a source of trouble for consumer confidence readings. This is a mixed report but the strength in the jobs readings confirms last week's very strong employment report where gains are being driven by domestic demand.

Recent History Of This Indicator:
The small business optimism index has been flat but key components have been showing solid strength including hiring plans and especially job openings. Capital investment and expansion plans, both of which are related to future employment, have also been special positives. The Econoday consensus is calling for a small gain to 95.0 in the December index vs 94.8 in November.