Higher wage costs limit profitability of business sector in U.S.

The National Federation of Independent Business (NFIB) index of small business optimism in U.S. reduced to 94.8 in November against 96.1 in October. The index was dropped due to fall in expectations for higher sales, economy outlook, and firms' assessment of their inventory levels. The expectations for higher sales to -1.0% in compare to 4.0% in October, and economy outlook to -7.0% from -4.0%, similarly, firms' assessment of their inventory levels contracted to -0.6% from -4.0%.  

The labor market variables remain steady in November. The share of firms with positions they are not able to fill right now was flat at 27%. This indicates higher wage pressure in the labor market.

"Against little evidence of firms raising selling prices (3%, previous: 2%), higher wage costs have the potential to limit profitability for the business sector", says Barclays in a research note.