US small business optimism improves a touch in March

Small business sentiment in the US improved just a touch in March, according to the National Federation of Independent Business.

The small business optimism index nudged up to 101.8 from 101.7 in February, but was still below consensus expectations of 102.0.

"Small business owners continue to create jobs, expand their operations, and are enjoying strong sales," said NFIB president and chief executive Juanita D. Duggan.

"Since Congress resolved the shutdown, uncertainty has declined as small business owners add jobs, increase sales, and invest in their businesses and employees."

NFIB chief economist Bill Dunkelberg said owners are growing their businesses and expect that they can sell more if they can produce more with additional employees.

"Investment spending has been solid for the past two years and owners are choosing to invest in their workforce as well by creating new jobs and raising wages," he said.

Ian Shepherdson, chief economist at Pantheon Macroeconomics, said: "This is disappointing; we expected clear rebounds in the key expectations components - for the economy and firms’ own sales - but both were unchanged, despite the rebound in stock prices and the upturn in most of the labour market components of the survey, which were released last week ahead of the employment report, as usual.

"The short-term relationship between the stock market and sentiment is variable, though, so we remain of the view that the survey will respond soon. Elsewhere, capex intentions were unchanged at 27, having dropped to 25 from 30 as the stock market fell. Again, we’re disappointed by today’s number but we think better news is coming. In the meantime, though, business capex in H1 is set to be much weaker than in the second half of last year."