Small-business optimism index hits three-year high

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Another sign of hope for the economy: An index of U.S. small-business optimism rose last month to the highest level since December 2007.

The National Federation of Independent Business said its optimism index gained 1.5 points to 93.2 in November, the fourth straight monthly increase.

But the NFIB noted that the mood of small business owners remained depressed compared with what would be normal at this stage of an economic recovery. The index was mostly above 100 each month from 2002 through mid-2006, for example.

An index reading of 93.2 is “still very weak, closer to a recession reading than indicative of a recovery,” said Bill Dunkelberg, the group’s chief economist.

The index hit a low of 81.0 in March 2009, at the depths of the recession. It quickly rebounded but has mostly been stuck between 88 and 90 since May 2009.

This month, “It was encouraging to see substantial improvement in expectations for economic performance (sales, business conditions), critical if spending and hiring are to elevate beyond survival and replacement levels,” Dunkelberg said in a report.

“And plans to hire, make capital outlays and invest in inventories all rose, albeit from historically low levels,” he said.

-- Tom Petruno