Latest report provided one of the lowest Small Business Optimism readings since the survey began in 1974. The Small Business Optimism Index for December from the National Federation of Independent Business (NFIB) was released on Tuesday.  The index results concern December although at some points in the report it is confusingly called the “January 2013 Report” by the NFIB.  The index increased from 87.5 to 88.0, which was the second lowest reading since March of 2010.  The report referred to the result as “one of the lowest optimism readings in survey history”.  The monthly political rant by NFIB Chief Economist Bill Dunkelberg focused on the controversial deal to resolve the fiscal cliff crisis (also known as the American Taxpayer Relief Act of 2012 ). The report indicated that although small business sales showed some improvement, job creation was almost at a standstill, although it had “improved infinitesimally” from the November report.  Credit demand was weak and only 6 percent of the owners surveyed stated that all of their credit needs were not met.  Capital spending remained at an historically-low “maintenance mode” with capital outlay plans remaining “at recession levels”. From the report: While owner optimism crept up 0.5 over November’s historically-low report, the 88 point reading was still the second lowest since March 2010. December’s poor report resulted largely from a deterioration of labor market components, and the surprising percentage of owners who still expect business conditions to worsen in the next six months. *   *   * The Index is at a recession level reading as pessimism prevails; December’s reading is certainly not typical during a recovery. Also on Tuesday, the Federal Reserve released its Consumer Credit report for November .  Although economists expected consumer credit to increase by $12.75 billion after October’s $14.2 billion advance, the Fed reported that the increase amounted to $16.05 billion.  The result was seen as evidence of a strengthening economy.  Revolving credit, as used with credit cards, increased by $819 million.   U.S. Economic Profile | 1.08.13 From the report: In November, consumer credit increased at a seasonally adjusted annual rate of 7 percent.  Revolving credit increased at an annual rate of 1 percent, while nonrevolving credit increased at an annual rate of 9-1/2 percent. The major ETFs expected to respond to the Small Business Optimism Index for December and the Federal Reserve’s Consumer Credit report for November are: iShares Russell 2000 Index ETF (NYSEARCA: IWM )  -0.07%   Learn More About iShares iShares Russell 2000 Growth Index ETF (NYSEARCA:IWO)  -0.02% Consumer Discretionary Select Sector SPDR Fund ETF (NYSEARCA: XLY )  -0.29% Consumer Staples Select Sector SPDR Fund ETF (NYSEARCA: XLP )  -0.28% WisdomTree SmallCap Dividend ETF (NYSEARCA:DES)  -0.29% XLY, TZY: Big ETF Outflows Bottom line:  The latest Small Business Optimism report from the National Federation of Independent Business indicated that a surprisingly high number of small business owners expect economic conditions to worsen during the next six months.  The highly-political agenda of the NFIB is usually apparent in its reports and one must look beyond the post-election grumbling to find worthwhile economic data.  On the other hand, the Federal Reserve reported a healthy expansion of consumer credit, beyond economists’ expectations.  Sign up for Wall Street Sector Selector’s FREE Stock Market Timing Indicator!    Disclaimer: The content included herein is for educational and informational purposes only, and readers agree to Wall Street Sector Selector’s Disclaimer , Terms of Service , and Privacy Policy before accessing or using this or any other publication by Wall Street Sector Selector or Ridgeline Media Group, LLC.