The NFIB’s small business confidence index came in at 96.6 for May — the highest reading since 2007.
That also beat expectations for 95.8.
Pantheon Macro’s Ian Shepherdson says this index is more important than payrolls, and sees this jump to the as a major shift.
“At last, small businesses are on the move. We have been waiting for four years for a clean break to the upside, and it’s finally here. The rise in the headline largely reflects a 9-point jump in economic expectations and a 5-point rise in sales expectations, but several other components rose too.”
Here’s his chart:
NFIB chief economist Bill Dunkelberg was more subdued in his reading of the data, noting that four components most closely related to GDP and employment growth — job openings, job creation plans, inventory and capital spending plans — collectively fell 1 point in May.
“…The entire gain in optimism was driven by soft components such as expectations about sales and business conditions,” Dunkelberg said in a statement. “With prices being raised more frequently in response to rising labour and higher energy costs it is clear that small businesses are unwilling to invest in an uncertain future.”