US: Small Business Optimism up in April, yet hiring has begun to moderate - Wells Fargo

The NFIB Small Business Optimism index rose for the third consecutive month to 103.5. According to analysts at Wells Fargo, trade uncertainty will pressure the index in coming months, as capex plans remain subdued and market volatility returns.

Key Quotes: 

“Much of the rebound in the headline index the past three months reflects some relief over the stock market rebound to start the year, but the underlying components nevertheless reflect a historically strong labor market.”

“Plans to increase hiring rose two points in April. Finding quality labor remains a top concern, and is perhaps behind the slowing trend in small business hiring seen in the ADP jobs report.”

“Escalating trade hostilities the past week will challenge small businesses, which have less bargaining power with suppliers and are therefore more susceptible to higher input costs. Owners had already begun suggesting that poor sales were a growing concern, suggesting limited scope to pass on higher prices.”