Magazine article Economic Trends

Summary

Magazine article Economic Trends

Summary

Article excerpt

OPTIMISM INDEX

The Small Business Optimism Index for June hit 103.0 (1986=100). The Index has averaged 103 or higher over the past 15 months, unprecedented since the monthly surveys started in 1986. This is a very strong run, confirming the view that 2004 will be the best economy in 20 years.

LABOR MARKETS

Small business owners continued to create new jobs, although not at the same pace as earlier in the year. They added a seasonally adjusted 0.04 employees per firm. The job creation leaders were manufacturing firms, adding 1.4 employees per firm, and agricultural firms, adding 0.8 employees per firm. The percent of owners with at least one hard-to-fill job opening fell two points to 20 percent of all firms. The percent of owners reporting the use of temporary or employees rose another point to 17 percent, one indicator that the job markets continue to strengthen. By industry, construction was the leader in plans to create jobs. Manufacturing followed. Hiring plans were strongest in the East South Central states and weakest in the Mountain and East North Central states.

INVENTORIES

A net minus 1 percent reported increasing inventory stocks, down three points from last month. Plans to add to inventories rose two points to a near-record net 9 percent of all firms, a very strong reading. Sales were strong and inventory was taken off the shelves as fast as owners put it out.

INFLATION

A net 29 percent reported higher selling prices, up four points from May. Price hikes have not been this prevalent since 1981. For policymakers, the concern is how long this will last. The hikes started in the service sector. The expansion of price hikes to other sectors may be somewhat encouraged by rising energy costs, but overall it looks like owners are taking advantage of rising demand. Twenty-eight (28) percent of all owners planned to raise prices, double the level of one year ago, but two points off May's reading. Perhaps the relief rally in price hikes is peaking, which is good news for policy-makers.

CAPITAL SPENDING

Capital spending plans unexpectedly fell four points to 28 percent. Reports of capital outlays over the past six months lost five points, falling to fifty-nine percent of all firms--a solid figure but not spectacular. Forty-four (44) percent reported spending on new capital equipment, 22 percent acquired vehicles and 14 percent improved or expanded their facilities. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.