The National Federation of Independent Business (NFIB) has released its monthly index on small business optimism, and the gain, though small, marks the sixth straight month of improvement. The index reading of 94.3 is 0.4 points higher than the January reading. The consensus estimate had been for a rise to 95.
Business owners are more optimistic about sales growth and less optimistic about business conditions. The lack of faith in conditions is tied directly to high gasoline prices. As consumers dig deeper to pay for gasoline, they are left with less to spend on other purchases.
According to the survey, 1 in 5 business owners plans to raise prices in the next few months, which will tend to drive core inflation higher even as personal consumption expenditures rise with the cost of gasoline. The NFIB does not expect first quarter growth to match fourth quarter 2011 growth, but the group does expect to continue the positive trend.
The NFIB report is available here.
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