The National Federation of Independent Business (NFIB) Tuesday morning reported that its small business optimism index for February rose 0.1 point from 97.9 in January to come in at 98.0. The January reading dropped 2.5 points, after the index posted an eight-year high of 100.4 in December.

The four “hard” measures of the index posted mixed results last month. The job creation component slipped two points to 12%, the job openings component rose three points to 29%, capital spending plans remained flat at 26% and inventory investment plans rose two points to 4%.

Some 14% of small business owners plan to raise employees’ pay in the next several months. That is up two points compared with January, on a seasonally adjusted basis. The report notes:

The reported gains in compensation are still in the range typical of an economy with reasonable growth, and labor market conditions are suggestive of a tightening, which will put further upward pressure on compensation along with government regulations including the healthcare law.

The NFIB’s chief economist said:

In spite of slow economic activity and awful weather in a lot of the country, small business owners are finding reasons to hire and spend which is great news. … Large firms have been powering the economic recovery since the Great Recession, but that may be shifting to the small business sector. February’s data suggests there are fundamental domestic economic currents leading business owners to add workers and these should bubble up in the official statistics and support stronger growth in domestic output.

The NFIB reports that 29% of business owners currently have positions open that they are unable to fill (up three points from January) and that 47% said there were few or no qualified applicants for the open positions.

Business owners said their single most important problem is government regulations and red tape (21%), taxes (20%) and quality of labor (14%). The least important problems are inflation (2%) and cost of labor (6%).

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