This morning’s report on optimism for small businesses improved for the third straight month in June, as the index of small business optimism from the NFIB increased from 93.8 up to 94.5 and exceeded consensus expectations of 93.9. June’s increase also represents the third straight monthly increase in the index, and while that may not sound like much, the last one was in the fourth quarter of 2014. That’s the good news. The bad news is that this month’s reading is still 1.5 points below the average reading of 96.0 dating back to 2000 and is still below where it closed out 2015. Additionally, as noted in the report from the NFIB, “…more owners still expect conditions to be worse than expect improvement.”
The table to the right shows which issue business owners say is their number one problem. As is the case practically every month, Taxes and Govt Red Tape top the list at a combined 42%. Behind those two problems, business owners are increasingly citing Quality of Labor as a problem, while Poor Sales declined. Given the dollar’s recent strength and the plunge in interest rates post-Brexit, it shouldn’t be too much of a surprise to see that Inflation and Interest Rates are the two issues that have been cited the least by respondents at 2% each.