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NFIB: Small Businesses Are Downright Giddy

The small business optimism index rose to a 34-year high, according to a National Federation of Independent Business survey.

The National Federation of Independent Business small-business optimism index rose 3 points in May to a reading of 107.8, its second-highest level in 45 years. The number is just below the record level of 108 reached in July, 1983.

The index was driven largely by small businesses reporting high numbers in several key areas including compensation, profits, and sales trends.

"Main Street optimism is on a stratospheric trajectory thanks to recent tax cuts and regulatory changes. For years, owners have continuously signaled that when taxes and regulations ease, earnings and employee compensation increase," said NFIB President and CEO Juanita Duggan.

Positive earnings trends reached a survey high at a net three percent, while positive sales trends are at the highest level since 1995.

A net 19 percent of small business owners are planning price increases, the highest since 2008 and a signal of a strong economy. In addition, a net 15 percent reported higher nominal sales in the past three months, up an astonishing seven points and the sixth consecutive strong month for sales.

"Small business owners are continuing an 18-month streak of unprecedented optimism which is leading to more hiring and raising wages," said NFIB Chief Economist Bill Dunkelberg. "While they continue to face challenges in hiring qualified workers, they now have more resources to commit to attracting candidates."

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