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The National Federation of Independent Business (NFIB) Tuesday morning reported that its small business optimism index for October dipped slightly from 107.9 in September to come in at 107.4. The August index reading of 108.8 was the highest in the 45-year history of the index. The consensus estimate from economists had called for the October index to tick up from 107.9 to 108.0.

Some 34% of small business owners reported raising employees’ pay in the past three months. That’s down three points on a seasonally adjusted basis compared with September’s all-time high total of 37%. Since January of 2017, net compensation changes have increased by four percentage points. Some 23% of small business owners are planning to raise wages in the next three months, down a point month over month.

The four “hard” measures of the index posted mixed results last month. The job creation component fell one point month over month in October to 22%, the job openings component was unchanged at 38%, capital spending plans also remained unchanged at 30% and plans to increase inventory investment rose two points to 5%.

For 2017 the average monthly index was 104.8, the highest ever. The previous annual record was 104.6 set in 2004. For the first 10 months of this year, the average is 107.1.

NFIB President and CEO Juanita Duggan commented:

For two years, small business owners have expressed record levels of optimism and are proving to be a driving force in this rapidly growing economy. The October optimism index further validates that when small businesses get tax relief and are freed from regulatory shackles, they thrive and the whole economy prospers.

In its commentary on the October report, the NFIB noted:

The employment picture is exceptionally good as small businesses hire or try to hire at record rates. Job gains have averaged 210,000 a month this year. Both hours worked and hourly wages rose in October, a good boost to incomes. The unemployment rate for individuals with less than a high school education is a shade over 5 percent, compared to a long term average of 9 percent. Earnings for this group are also growing faster than for those with higher educational attainment. … Owners report raising compensation at record rates, and this is apparently working, as the participation rate for prime working age individuals is rising in response to better pay and more widespread job availability. An unburdened small business sector is great for employment and the general economy.

A record-tying high of 38% of business owners reported job openings they couldn’t fill. More than half (53%) reported few or no qualified applicants for available jobs. Some 23% (a record high) of business owners said finding qualified workers is their single most important business problem.