Small business owners were more upbeat about the economy last month, with the NFIB Optimism Index rising to 96.6 – the highest reading since September 2007. But that positive reading came with a note of caution from the NFIB’s chief economist: “Four components most closely related to GDP and employment growth (job openings, job creation plans, inventory and capital spending plans) collectively fell 1 point in May. So the entire gain in optimism was driven by soft components, such as expectations about sales and business conditions”.
Hiring reached the fastest pace in six years in April, with 4.71 million hires – the most since June 2008. And the number of job openings rose to 4.46 million – the highest since September 2007.
Wholesale businesses built up their stockpiles in April, with a 1.1% increase in inventories to match March’s 1.1% gain. The result marks ten straight months of rising inventories.
On the downside, consumer sentiment fell to the lowest level in three months, led by negative expectations.
Retail sales rose .3% last month on demand for cars and home-improvements products, while spending in other categories tapered off. Sales declined at grocery stores, bars and restaurants, and clothing, electronics and sporting goods stores.
The World Bank cut its global growth forecast to 2.8% for the year, after a previous forecast of 3.2%, as the Ukraine crisis combined with an unusually cold winter in the US dampened growth in the first half of the year.