- Bill Dunkelberg, NFIB chief economist
Winter's slowdown is over. Confidence among the U.S. small-sized companies picked up more than expected in March, with six out of 10 sub-indexes posting solid improvement, suggesting the economy will gain momentum soon, boosted by stronger spending.
A report from the NFIB, a gauge of optimism among small companies surged to 93.4 last month, accelerating from 91.4 a month earlier and outpacing analysts' predictions for a 92.3 figure. The main upward contribution came from the sub-index of real sales, as 12% more expect a pickup in sales in the coming months. At the same time, companies showed less willingness to increase employment and make capital outlays. Despite solid gains, the recovery in indexes that posted increase have gone nowhere. Economists believe that as long as politicians in Washington continue to ignore policies that can potentially restore the middle class growth and boost job creation, improvement will be limited.
The economy posted sluggish first quarter's growth. Severe weather, trade deficits and pessimistic consumers and companies all took a toll on spending during first three months. Uncertainty remains high and speculations about "new normal" growth are heating up, suggesting that the economy should get used to weaker spending and lower levels of hiring.
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