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Small Businesses Still Hopeful03-12-20 | Economic News

Small Businesses Still Hopeful

Optimism Index Posts Gains in February

The National Federation of Independent Business reported that the Small Business Optimism Index had a modest rise of 0.2 points in February to 104.5 as four of the index's 10 components increased. The biggest winner in that respect, leaping eight percentage points, was the share of business owners who expect continued improvement in the economy.

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The other components that experienced gains were: the prospect that credit conditions will improve, up three percentage points, the proportion of firms planning to add staff with a two-point rise and the proportion of businesses with current job openings, which added one percentage point.
The improvement in the latter two components is consistent with the most recent employment data, which show employers adding an average of 243,000 jobs a month over the past three months, according to the Wells Fargo Economics Group.

However, they admit that, "Given that most of the responses to the NFIB survey were collected before the recent escalation of the COVID-19 outbreak and financial market disruptions, many may be quick to dismiss another strong economic report."

In spite of that, the economics analysis team believes that there are bright spots in the February survey: "economic activity appears to have been brisk prior to any intensification of the COVID-19 fears (and) mentions of the coronavirus were not apparent in the survey and have not been too apparent in other high frequency surveys, at least through February."

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