This morning we got the latest NFIB Small Business Optimism survey, which showed a modest uptick in April, from 92.6 to 93.6.
Not only does the report suggest that sentiment is improving toward the higher end of economist's forecasts, it contains one paragraph that stands out as really good news for American workers:
"53 percent reported hiring or trying to hire (up five points), but 46 percent reported few or no qualified applicants for the positions they were trying to fill. Hiring activity increased substantially, but apparently the 'failure rate' also rose as more owners found it hard to identify qualified applicants. 12 percent of owners cited the difficulty of finding qualified workers as their Single Most Important Business Problem, unchanged from earlier months and a high reading for this recovery period."
View of a trio of workers, two welders and a riveter, as they make ship boilers at the Combustion Engineering Company, Chattanooga, Tennessee, June 1942. (Photo by Alfred T. Palmer/Getty Images)
Basically, an increasing number of small businesses are hiring, and more and more small businesses are growing frustrated about their ability to fill positions.
This report augers well for labor bargaining power and higher wages, as shown in this chart tweeted by Johnny Bo Jakobsen, chief U.S. analyst at Nordea Markets AB:
This also echoes a point argued by George Pearkes of Bespoke Investment Group, who, in an interview on BloombergTV on Monday, argued that tightening labor markets were driving an increase in labor's share of gross domestic product. The report's detail underscored the good news: "29 percent of all owners reported job openings they could not fill in the current period, up four points, revisiting the highest level for this expansion. 13 percent reported using temporary workers, up three points. A seasonally adjusted net 11 percent plan to create new jobs, up two points from March."