The National Federation of Independent Business (NFIB) Tuesday morning reported that its small business optimism index for March rose two points from 91.4 in February to come in at 93.4. The index has yet to break through 95 during the post-financial crisis recovery.
The single most visible increase in the index components for March came in the percentage of business owners — 12% — who say they expect real sales to increase. That number rose nine points in March.
The NFIB’s chief economist said:
[T]hroughout this recovery we’ve seen these types of increases only to have them go nowhere. As long as Washington continues to ignore policies that could restore the middle class, job creation will continue to be sub-par.
The NFIB reports that 22% of business owners currently have positions open that they are unable to fill and that 41% said there were few or no qualified applicants for the open positions.
One promising note was struck in the wages area. On a seasonally adjusted basis, a net 23% of small businesses reported paying higher compensation, the best reading since 2008. A net 14% of business owners plan to raise compensation in the next few months. Both those numbers match the February report.
The NFIB also notes, “The reported gains in compensation are now solidly in the range typical of an economy with solid growth.” The faster job growth that the NFIB wants to see is beginning to materialize.