US Business Confidence at 8 Year High

U.S. small business optimism jumped in December to its highest level in more than eight years, underscoring the economy’s strengthening fundamentals despite slowing global growth.

The National Federation of Independent Business said on Tuesday its Small Business Optimism Index increased 2.3 points to 100.4 last month, the highest reading since October 2006.

The index, which crossed the 100 mark for the first time in eight years, is now back at its prerecession average. It was bolstered by a surge in sales expectations as well as hiring, capital outlays and business expansion plans.

“This is probably why the gross domestic product numbers have been looking better because the small business sector has actually started to contribute to growth,” William Dunkelberg, NFIB chief economist, told Reuters.

The small business sector, which is estimated to account for about half of the country’s overall GDP, added to upbeat employment data in painting a bullish picture of the economy even as dark clouds settle over the global economy.

The economy grew at a 5.0 percent annualized rate in the third quarter, the fastest in 11 years, and is expected to have maintained a solid growth pace in the October-December quarter.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza