Small-Business Owners' Confidence Unchanged

Small-business owners' confidence about their economic situation was unchanged in October after rising modestly in recent months, with softer sales prompting breaks in hiring and capital spending. The National Federation of Independent Business's small-business optimism index held steady at 96.1 last month. Economists surveyed by The Wall Street Journal expected the index to inch up to 96.2. The gauge remains below the long-term average reading of 98. Small-business owners snapped a four-month trend of employment growth last month, and, as the NFIB reported in its October small-business snapshot last week, 27% of owners reported jobs they couldn't fill. Of the 55% of firms hiring or looking to hire, most reported difficulty finding qualified applicants for the positions they were trying to fill, a sign of diminishing labor market slack. About one-fifth of owners surveyed said they lifted employees' wages last month, down slightly from the past two months. The NFIB's findings come in contrast to a recent report from payroll processor Automatic Data Processing Inc. and forecasting firm Moody's Analytics, which showed small businesses powered growth in private payrolls last month. The report also follows a much stronger-than-expected October jobs report from the government on Friday, which showed overall hiring rose at the fastest clip this year alongside a solid acceleration in wage growth. The NFIB said Tuesday that although its labor market indicators fell from September, they remain at historically strong levels. Meanwhile, 58% of owners reported capital outlays, unchanged from September. The number of businesses planning to spend in the next three to six months rose one point to 26%. Of the 55% of owners who said it wasn't a good time to expand, most blamed weak sales. Those reporting increased sales fell last month while a higher number of owners reported lower sales. Twelve percent cited weak sales as their top business problem, up slightly from September. There is still no sign of building inflation in the small business sector, according to the trade group. Just 2% raised selling prices while 15% reported cutting prices, essentially flat from September. Seventeen percent of owners said they plan to lift prices in the next few months, up 1% from a month earlier. "Owner expectations for the economy over all appear to anticipate a continuation of underperformance," the NFIB said, with the net percent expecting better business conditions unchanged at a net negative 4% in October. The NFIB's monthly index is based on a survey of about 1,400 respondents. Write to Lisa Beilfuss at

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