“When considering the record high levels of optimism, one would think small firms would increasingly opt for capital over labor, especially given the unplanned increase in wages, complaints over the quality of labor candidates and the easy availability of capital (contrary to what they say). Perhaps confidence is not quite as strong as the survey suggests,” said Steve Blitz, chief U.S. economist for TS Lombard, after the release of the October NFIB survey.
“Whenever we see sentiment run up so fast to such high levels, we suspect it can reverse just as quickly,” Blitz added. “This possibility may very well be the signal small businesses are sending given how their commitments to expand increasingly focuses on labor rather than capital. Opinions are cheap and machinery is much more expensive than labor.”
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