Latest / Markets with Megan: A Quick Financial Markets Update / Does Small Business Data Hint at a Fed Shift? | S3 E158 | 08-11-26

Transcript

Does Small Business Data Hint at a Fed Shift? | S3 E158 | 08-11-26 · Markets with Megan: A Quick Financial Markets Update

• 0:00
  Megan Horneman: Small businesses are painting a pretty good picture about the economy.
• 0:04
  Megan Horneman: It is Tuesday, August the 11th, and this is Markets with Megan.
• 0:07
  Megan Horneman: If you like this podcast, you can subscribe, hit that alarm bell, share with your friends, family, colleagues, anybody who's interested about the economic data that makes the headlines, what it means for your investments, and the equity markets.
• 0:20
  Megan Horneman: This morning we received the July reading on the NFIB Small Business Optimism Index.
• 0:26
  Megan Horneman: And we like to look at this because small businesses do make up a good portion of the U.S.
• 0:30
  Megan Horneman: economy, especially from an employment standpoint.
• 0:33
  Megan Horneman: Small businesses make up about 46% of the private sector labor force.
• 0:38
  Megan Horneman: So we do tend to look at this to get some indication of what may be going on in the future.
• 0:44
  Megan Horneman: Now, this index actually came in better than expected, and it rose for the second consecutive month.
• 0:49
  Megan Horneman: It's at the highest level now since about August of 2025.
• 0:54
  Megan Horneman: But what we do is we strip out that headline number and look at the underlying components, and it measures sentiment on a variety of different things: hiring, capital expenditures, inventories, job openings.
• 1:06
  Megan Horneman: And what we saw was some pretty good details underneath, and especially from the employment side, it shows a very different picture from what we saw with those jobs report, the jobs report that we got last week.
• 1:17
  Megan Horneman: It shows that from the current job openings, they're at the highest level since March of 2025.
• 1:25
  Megan Horneman: And then hiring plans actually jumped significantly in the month of July.
• 1:30
  Megan Horneman: That means the future of hiring.
• 1:32
  Megan Horneman: So this is a good leading indicator for small businesses and their hiring plans.
• 1:36
  Megan Horneman: That rose to the highest since October of 2022.
• 1:40
  Megan Horneman: When you look at planned capital expenditures, now we know that this is a big AI story.
• 1:45
  Megan Horneman: That rose significantly as well.
• 1:47
  Megan Horneman: That's the highest we've seen since December of 2022.
• 1:51
  Megan Horneman: We're actually seeing them also a bit more optimistic about the being a good time to expand their businesses.
• 1:57
  Megan Horneman: And we haven't seen this really in the double digits for a while.
• 2:01
  Megan Horneman: And we're seeing that now the highest level since before the war started earlier this year.
• 2:06
  Megan Horneman: So overall, this is a pretty good report from the small business side of the economy.
• 2:11
  Megan Horneman: This we'll see if this filters into the labor market data that we should be getting in the in the future months.
• 2:16
  Megan Horneman: And then also, um, what does this tell the Federal Reserve?
• 2:19
  Megan Horneman: Um, does this mean that this is some of the things that they should pay attention to, especially from the labor market?
• 2:25
  Megan Horneman: Um, we'll get some more information tomorrow, is the big CPI report that'll have a lot of implications from a market standpoint, and then also for what the Fed may do at their next meeting.
• 2:34
  Megan Horneman: And if you want a history of our podcast, you can go to marketswithmegan.fm.
• 2:38
  Megan Horneman: Thank you.