Small business owners were more upbeat about the U.S. economy in May, according to a monthly industry survey.
The National Federation of Independent Business on Tuesday said its Optimism Index rose 1.4 points to 96.6 in the month, the highest reading since September 2007.
The NFIB cautioned, however, that while the survey has showed an improvement in sentiment for the third straight month, the index remains far below readings that have normally accompanied an expansion in the U.S. economy.
"[F]our components most closely related to GDP and employment growth (job openings, job creation plans, inventory and capital spending plans) collectively fell 1 point in May. So the entire gain in optimism was driven by soft components, such as expectations about sales and business conditions," said NFIB chief economist Bill Dunkelberg. "With prices being raised more frequently in response to rising labor and higher energy costs it is clear that small businesses are unwilling to invest in an uncertain future."
Small business owners increased employment by a seasonally adjusted average of 0.11 workers per firm in May. Roughly 11 percent of the owners reported adding an average of 3.0 workers per firm over the past few months.
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The remaining 77 percent of owners made no change in employment.
Twenty-four percent of all owners reported job openings they could not fill. Fourteen percent reported using temporary workers, which has been unchanged for several months.