Texas Border Business
The data point we’ll look at today is the Small Business Optimism Index from the National Federation of Independent Businesses (NFIB).
The index fell from 100.6 in June to 98.8 in July. This is a small decline and the index still stands near its historical average. It is above where it was in March, April, and May, although well below pre-pandemic highs in January and February.
According to the report, the subindexes were mixed, with four improving, five declinings, and one remaining unchanged from June. Importantly, the uncertainty index rose sharply and the expectations for better business conditions declined even more.
- Real sales expectations in the next 3 months decreased a net of 5%.
- The percent of owners thinking it is a good time to expand decreased 2 points to 11% of owners.
- Earnings trends over the past 3 months improved 3 points to a net negative 32%.
- Job creation plans increased 2 points to a net of 18%.
Looking ahead: Small businesses are still relatively optimistic, but the drop in their outlook from June to July coincides with the resurgence of the virus and the increased uncertainty that has resulted. Small businesses are still more optimistic than they were at the depths of the economic fallout from COVID-19, but whether that outlook improves in August will be determined by the spread of the virus.
-Curtis Dubay, Senior Economist, U.S. Chamber of Commerce