Confidence among small U.S. business owners touched its highest level in almost three years in November, reflecting improvements in the labor market and a pick-up in capital spending, a survey showed on Tuesday.
The National Federation of Independent Business' optimism index rose 1.5 points to 93.2, the highest reading since December 2007 when the recession started.
The downturn, which was the longest and deepest since the Great Depression of the 1930s, officially ended in June 2009. The index was up for a fourth straight month in November and continued to outperform all recovery periods since 1973, the NFIB said.
Seven of the index's 10 components posted gains, with job creation and spending plans accounting for half of the rise. The survey also found that more businesses raised compensation and job creation turned positive after being negative for 32 of the last 35 months.
About 9% of the 807 small businesses that took part in the survey conducted through Nov. 30 reported unfilled job openings, down one percentage point from the prior month.
Over the next three months, 9% of businesses plan to increase employment, up one point, while 12 percent intended to lay off workers, down one point from the previous survey.
"Overall, job creation is likely to continue but at a tepid pace, far below the 300,000 plus figure needed each month for the next three years to keep up with population growth and restore most of the jobs lost in the recession," the NFIB said.
About a fifth of respondents planned spending on capital and many said their credit needs were met. Businesses also indicated they continued to liquidate inventories and more firms were raising prices.
If the price increase pattern holds, it could ease the Federal Reserve's the fear of deflation, a harmful downward spiral in prices.
"The trend is clearly supportive of higher prices in future months," the NFIB said.