The National Federation of Independent Business said on Tuesday its
Small Business Optimism Index increased 1.4 points to 96.6 last
month, the highest reading since September 2007, when the economy
was about to slide into recession.
The third straight month of increases in the index, which is widely
viewed as a good indicator of the economy's health or lack of,
further buoyed the growth outlook.
Data on Friday showed the economy scored a fourth successive month
of job gains above 200,000 in May, resulting in it regaining all the
jobs lost during the recession.
The economy contracted at a 1.0 percent annual rate in the first
quarter, dragged down by an unusually cold winter and businesses
restocking their warehouses at a pedestrian pace. Second-quarter
growth is expected to top a 3.0 percent pace.
Five of the index's 10 components advanced, with big gains in sales
and earnings expectations. Small businesses were also very upbeat
about prospects over the next six months.
There were also increases in the share of businesses planning to
create new jobs, as well as those who believed that this was a good
time to expand.
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Small businesses, however, appear to be in no hurry to increase
inventories, even as they are optimistic about sales.
The survey also found "price hikes are more widespread than at any
time since 2008," a potential sign that inflation pressures could
soon be steadily building up.
(Reporting by Lucia Mutikani; Editing by Andrea Ricci)
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