Optimism among small-business owners climbed higher in September to pre-pandemic levels. The National Federal of Independent Business said Tuesday its optimism index rose 3.8 points to 204, a level it last reached in January. That is among the highest readings recorded in the closely watched gauge of business confidence. Economists had expected the index to more or less hold steady near last month's reading of 100.2. The range of estimates was between 99 and 102, so this was twice as strong as the most bullish forecast. The improvement comes as many businesses have been able to open more fully. It suggests that the end of small-business relief programs, which mostly wrapped up in August, did not hurt business owners as much as feared.
The threat of a second round of shutdowns, however, still hangs over businesses. The NFIB's uncertainty index climbed to 92, higher than it was when infections were at their height this summer or lockdowns were at their most stringent this spring. "As parts of the country continue to open, small businesses are seeing some improvements in foot traffic and sales," said NFIB Chief Economist Bill Dunkelberg. "However, some small businesses are still struggling financially to operate at full capacity while navigating state and local regulations and are uncertain about what will happen in the future."
Every component of the index apart from expected credit conditions improved. With interest rates already extremely low, there is not much room for credit conditions to improve. Plans to increase employment, make capital outlays, and grow inventories all rose. So did the share of business owners expecting economic conditions to get better over the next three months. Expectations for sales also improved and more owners said now is a good time to expand.
The NFIB is a trade association for small business owners.
The final months of the year are traditionally slower periods for housing, but not in 2020. Dr. James Gaines, the chief economist for Texas A&M University states, "The current market is being fueled by housing demand that paused during last spring's pandemic lockdowns as well as future buys from next year. The mortgage interest rate has been a magnet for some of the demand." Gaines notes that we are now seeing strong evidence the typical fourth quarter drop off will not occur this year as the demand continues.
Gaines does note that foreclosures and short sales caused by the pandemic are simply delayed due to the government forbearance program. "I don't think we are going to see this issue until at least this time next year," Gaines notes. "I think it will be in the second half of 2021."
Current surge in home buying and price hikes continues......
North Texas home sales and prices have surged to record levels in the last three months – one bright spot during the pandemic. The boom in Dallas-Ft Worth's housing market is likely to continue through 2021 as the effects of COVID-19 slowly subside, says Dr James Gaines, chief economist with the Real Estate Center at Texas A&M University. "Dallas is still a robust market. Dallas is going to continue to do well – probably 2021 is looking similar to this year."
North Texas homes sales during the first nine months of 2020 are running 6% ahead of last year's record. And median sales prices in September were up 10% to near an all-time high of more than $290.000. "Employment is still high," Gaines said. "Population growth is still coming here. The demand for housing is still being created."