by Calculated Risk on 2/09/2016 08:50:00 AM

From the National Federation of Independent Business (NFIB): After Modest Gain Last Month, Small Business Optimism Takes a Stumble

The Index of Small Business Optimism fell 1.3 points from December, falling to 93.9. ...

Reported job creation improved in January, with the average employment gain per firm rising to 0.11 workers per firm from -0.07 workers in December. ... Fifty-two percent reported hiring or trying to hire (down 3 points), but 45 percent reported few or no qualified applicants for the positions they were trying to fill. Fourteen percent reported using temporary workers, down 1 point.

The percent of owners citing the difficulty of finding qualifed workers as their Single Most Important Business Problem was unchanged at 15 percent, number 3 on the list of problems behind taxes and regulations and red tape, the highest reading since 2007. This suggests that employers will face continued wage and benefit cost pressure in order to attract and keep good employees.

Twenty-nine percent of all owners reported job openings they could not fill in the current period, up 1 point and at the highest level for this expansion. This is a solid reading historically and is suggestive of a reduction in the unemployment rate.
emphasis added

Click on graph for larger image.

This graph shows the small business optimism index since 1986.

The index decreased to 93.9 in January.

The responses on the labor market are encouraging and suggest further reductions in the unemployment rate and higher wages.