Small Business Carrying Its Weight

Summary

  • According to the latest release of the NFIB Small Business Optimism Index, small businesses have a favorable view on economic growth.
  • The index rose 2.3 points in November to 104.7, the largest monthly increase since May 2018.
  • Small businesses continue to report finding qualified labor as an issue, with 26% of owners citing this as a concern.

According to the November release of the NFIB Small Business Optimism Index, small businesses have a favorable view on economic growth. The index rose 2.3 points in November to 104.7, the largest monthly increase since May 2018. There was not much to not like in the report as 10 of the seven index components rose.

Highlights from the report include:

  • "The NFIB Uncertainty Index fell 6 points in November to 72, adding to the 4-point drop in October and the lowest reading since May 2018."
  • "Actual job creation in November exceeded that in October, as small businesses continued to hire and create new jobs."
  • "Reports of higher selling prices remained subdued, so rising labor costs are still not pushing up inflation on Main Street."

Small businesses continue to report finding qualified labor as an issue, with 26% of owners citing this as a concern. Interestingly, and maybe because labor is so hard to find, the percentage of firms citing labor cost as the "single most important issue" fell significantly to 4% from 10%. The survey low for this reading is 2%.

November's report seems to put to rest recession concerns with small businesses. There is not much to not like in the report.

Original Post

Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.

This article was written by

HORAN Capital Advisors is an SEC registered investment advisor that manages investment portfolios for individuals and institutions. Our firm utilizes a disciplined investing approach that should create wealth for our clients over time. Our investment bias is to invest in companies that generate a steady return over time, i.e., singles and doubles. This singles and doubles approach tends to lead to investments in higher quality dividend growth/cash flow growth companies. On the other hand, there are times when a company's stock price seems to be trading below its fair valuation. Short term gains are possible in these situations. I have been managing investment portfolios for individuals and institutions for over fifteen years and believe investing is like running a marathon and not a sprint. Taking the road less traveled, more often than not, leads to higher returns. Visit: The Blog of HORAN Capital Advisors at (https://horanassoc.com/insights/market-commentary-blog)
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