US: Slight decline in small business optimism - Nomura

Analysts at Nomura note that the NFIB’s small business survey showed a slight decline in small business optimism as the headline index fell 0.9pp to 107.9 in September, remaining in highly elevated territory relative to historical levels.

Key Quotes

“Employment, capital outlay and expansion plans all continued to indicate strong growth from small businesses as aggregate demand remains elevated in the light of tax cuts and increased federal spending.”

“The net percent of firms reporting increased worker compensation improved 5pp to 37%, the highest reading in the survey’s history as tightening labor markets increased worker scarcity.”

“NY Fed Survey of Consumer Expectations: Consumers’ inflation expectations remained the same in September, consistent with the recent trend. Three-year ahead median inflation expectations remained at 3%. Over the one-year-ahead horizon, median inflation expectations also remained steady at 3%. The two measures have been essentially unchanged since April 2018.”