Friday Economic Snapshot: Small business optimism up, pessimism still lingering
Welcome to a new feature from Boating Industry — the Friday Economic Snapshot. We’ll bring you the week’s most significant economic indicators at the tail end of your workweek and throw in a little context. And, because it’s Friday, we promise to keep things nice and short.
For the week of May 13-17, 2013, we’ve seen the release of several important indicators, including the Small Business Optimism Index, the May update for residential construction and the Consumer Price Index (CPI).
Overall, this has been a solid week, with the Small Business Optimism rising to a new high for the recovery; housing starts in April were 13.1 percent higher than a year ago, and; the CPI decreased 0.4 percent, largely due to cheaper gasoline.
Small Business Optimism Index
After last month’s drop in small-business confidence, April’s Index of Small Business Optimism rose 2.6 points to 92.1, just above the recovery average of 90.7. Amid mixed numbers, pessimism abounds within the sector, as still far more of those surveyed expect business conditions to be worse in six months than those who think they will be better.
“Small-business confidence saw an uptick this last month, but it was a ho hum, yawn, at-least-it-didn’t-go-down reading. The sub-par recovery persists for the small business sector,” said NFIB chief economist Bill Dunkelberg. “Economic performance is contradictory — corporate profits are at record levels and the stock market hits new highs, yet GDP growth for the past six months has averaged about 1.5 percent and the unemployment rate is 7.5 percent. Nothing in the NFIB data suggests that the small business half of the economy is expanding other than by an amount driven by population growth and associated new business starts now in excess of terminations. The lack of leadership in Washington and the resulting uncertainty depresses consumers’ and business owners’ willingness to spend and invest, and make bets on the future.”
New Residential Construction
One of the key indicators of the American economy, housing data looms large over every major industry — especially ones that rely on disposable income.
With this month’s numbers, privately owned housing units authorized by building permits in April rose 14.3 percent to 1,017,000 over March’s 890,000. Privately owned housing starts (new construction) in April dipped 16.5 percent from March, but were 13.1 percent higher than the April 2012 rate. Similarly, housing completions dipped 14.3 percent from March, but ended up 13.1 percent higher than April of 2012.
Consumer Price Index
A key figure to watch in terms of inflation and raw materials prices, the Consumer Price Index for All Urban Consumers (CPI-U) decreased 0.4 percent in April. Over the last 12 months, the all items index increased 1.1 percent before seasonal adjustment.
As was the case in March, a sharp decrease in the gasoline prices was the primary cause of the decline in the seasonally adjusted all items index. The fuel oil index also declined while the electricity and natural gas indexes increased; the net result was a 4.3 percent decrease in the energy index. The food index, unchanged in March, rose 0.2 percent in April.
So, all things considered, the American economy keeps grinding along with mixed numbers that have been fluctuating month to month, but generally staying within a range that points toward continued, albeit slow recovery. Happy Friday!