NFIB: US Oct Small-Business Optimism Index Rises To 90.2

Small-business owner confidence increased in October but still hovers just above recessionary levels, according to data released Tuesday.

The National Federation of Independent Business's small-business optimism index edged up to 90.2 in October, from 88.9 in September. The October level is the highest since 90.8 posted in June. During the last recovery, the index often ran near or above 100.

In October, "owner optimism improved a smidge, mostly because the outlook for business conditions and real sales growth became less negative," said the NFIB report.

The subindex of expected business conditions in the next six months rose 6 percentage points, to -16%, and the expected higher real sales subindex increased 2 points, to -4%.

The new-jobs subindex weakened, falling 1 point, to 3% in October. Last week, the NFIB said small-business owners reported an average reduction of 0.1 employees per firm last month. That is better than September's net decrease of 0.3 employees per firm, but still extremely dismal.

The earnings trend subindex increased 1 point, to -26% last month. With sales still firmly negative, "capital expenditures remain depressed and there is little interest in investing in inventory," according to the report.

Weak sales have prevented business owners from raising prices. On a seasonally-adjusted basis, the net percentage of business owners raising selling prices fell 7 points, to -1% in October.

-By Kathleen Madigan, Dow Jones Newswires; 212-416-2466; kathleen.madigan@dowjones.com

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