NFIB: US Jan Small-Business Optimism Index Rises To 93.9 From 93.8

Small-business owner confidence in January rose for a fifth consecutive month, but that hasn't translated into more jobs, according to data released Tuesday.

The National Federation of Independent Business's small-business optimism index rose 0.1 point to 93.9 in January from 93.8 in December.

It was the fifth consecutive increase. Ignoring the spike posted last January and February, the latest index is at its highest reading since December 2007, when the U.S. was slipping into recession.

Subindexes covering expectations improved. The subindex of expected business conditions in the next six months rose 5 percentage points to -3% last month, and the expected higher real sales subindex increased 1 point to 10%.

The better sentiment didn't translate into expansive business decisions.

"Owners became less pessimistic about the outlook for business conditions and real sales growth, but that optimism did not show up in hiring or spending for more inventories," the NFIB said.

In January the inventory index dropped a steep 5 points to -3% and the new-jobs subindex fell 1 point to 5%.

Weak sales are behind the inaction. The actual earnings trend subindex gave up 2 points to fall to -24% after jumping 6 points in December.

Weak labor markets have been a key drag on the economic outlook.

The NFIB said that its member firms had 0 net increase in workers per firm last month. That lack of labor demand runs counter to the strong payrolls report released by the U.S. Labor Department on Feb. 3. That report showed the economy created 243,000 jobs in January.

"The NFIB data suggest that there will be some downward revision in BLS numbers," the NFIB report said, referring to the Bureau of Labor Statistics.

Pricing power remains extremely weak, a trend that will take pressure off the Federal Reserve. Seasonally adjusted, the net percent raising selling prices was -1% last month, down a point from December.

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

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