WASHINGTON - Confidence among small businesses rose in October to the highest level in five months as more companies projected sales gains and an improving economy, a private survey found.
The National Federation of Independent Business's optimism index increased to 91.7 from a September reading of 89. Seven of the index's 10 components rose and three declined. The measure, which averaged 100.6 in the five years before the recession began, has been below 93 since January 2008.
To help broaden the recovery, smaller firms need to increase hiring. A measure of job creation was little changed and capital spending plans declined, signaling a pickup in the world's largest economy will be slow to develop.
"The private sector will continue to slog ahead," William Dunkelberg, the group's chief economist, said in a statement.
October's gain in optimism is "not a huge move, but at least a decent jump, perhaps anticipating an acceleration in economic activity or a change in the 'management team' after the election," he said.
The gauge of expectations for better business conditions six months from now jumped 11 percentage points to 8 percent in October, the report showed.
The measure of respondents planning to hire over the next three months rose four points to a net 1 percent, according to the report.
Eight percent of businesses said they plan to hire, unchanged from the prior month. Fewer indicated they plan cut staff, with 13 percent anticipating workforce reductions, down 3 points from September.
Average employment growth was unchanged in October, after falling in all but two quarters since April 2007, which "raises the odds that Main Street may contribute to private sector job growth for the first time in over a year," Dunkelberg said.
A gauge of whether firms think this is a good time to expand increased by one point to 7 percent, while 73 percent said it is not, the survey said.