US small business confidence jumps to near 8-year high

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U.S. small business optimism surged in November to its highest level in nearly eight years, the latest indication the economy is positioned for faster growth in 2015.

The National Federation of Independent Business said on Tuesday its Small Business Optimism Index increased 2.0 points to 98.1 last month, the highest reading since February 2007.

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Owners were very bullish about business conditions over the next six months. They were also upbeat about sales and earnings, but continued to hold back on capital spending and hiring.

"What is needed is a translation of this optimism into spending and hiring," the NFIB said in a statement.

The survey added to employment and automobile sales data that have pointed to underlying strength in the economy as the year winds down. While economic growth is expected to slow down in the fourth quarter after two quarters of robust expansion, the pace is seen accelerating in 2015.

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While small business owners anticipated strong sales growth, they said it was likely to be achieved through price cuts as many of them remained cautious about raising prices. Businesses are still reluctant to ramp up inventory accumulation.

They, however, are steadily raising wages for workers.

"The reported gains in compensation are still in the range typical of an economy with reasonable growth, and labor market conditions are suggestive of a tightening, which will put further upward pressure on compensation," the NFIB said.