The National Federation of Independent Business said its Index of Small Business Optimism gained 3.8 points in April, rising to 90.6 and ending seven straight quarters of under 90 readings. 

Nine of the 10 index components rose, particularly the outlook for general business conditions and sales, and one was unchanged. Still, job measures barely moved and capital expenditure plans were flat.

“The gains are a step in the right direction, but they are not enough to signal a solid recovery is in place,” said William Dunkelberg, NFIB chief economist. “Owners are feeling a little better about things, but not enough to turn them into concrete action.”

Seasonally adjusted, the average employment per firm was negative 0.18 in April. Since July 2008, employment per firm has fallen steadily each quarter, logging the largest reductions in the survey’s 35-year history.

Eleven percent (seasonally adjusted) reported unfilled job openings, up two points but historically still very weak. Over the next three months, 7 percent plan to reduce employment (unchanged) and 14 percent plan to create new jobs (down 1 point), yielding a seasonally adjusted net-negative 1 percent of owners planning to create new jobs. That result is a point better than the March reading, but still very weak. 

The frequency of reported capital outlays over the past six months rose one point to 46 percent of all firms in April, two points above the 35-year record low reached most recently in December 2009. Of those making expenditures, 32 percent reported spending on new equipment (up two points), 15 percent acquired vehicles (down one point), and 10 percent improved or expanded facilities (up two points). Four percent acquired new buildings or land for expansion (unchanged), and 10 percent spent money for new fixtures and furniture (up one point).  

Plans to make capital expenditures over the next few months were unchanged at 19 percent, 3 points above the 35-year record low.

Four percent characterized the current period as a good time to expand facilities, up 2 points from March. A net 0 percent expect business conditions to improve over the next six months, up 8 points from March.

The net percent of all owners (seasonally adjusted) reporting higher nominal sales in the past three months improved 10 points to a net-negative 15 percent, still negative, but a huge improvement. It is the best reading since September 2008, just before consumers stopped spending in the fourth quarter of 2008. The net percent of owners expecting real sales gains gained nine points, rising to 6 percent of all owners (seasonally adjusted). 

A net-negative 18 percent of all owners reported gains in inventories (more firms cut stocks than added to them, seasonally adjusted), 10 points better than December’s record liquidation reading, but unchanged from February and March. This is the 25th negative double-digit month in a row, and the 35th negative month in a row. Plans to add to inventories improved five points to a negative 2 percent of all firms (seasonally adjusted) – still more owners planning to reduce stocks than planning new orders (and not borrowing money to support inventory investment).

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