The Outlook for Small Businesses is Bad, and Bad for the Economy
The NFIB reports:
For the fifth consecutive month, NFIB's monthly Small-Business Optimism Index fell, dropping 0.9 points in July--a larger decline than in each of the previous three months--and bringing the Index down to a disappointing 89.9.
While the national unemployment rate dipped marginally, for the nation's small businesses, the employment story is not a positive one. Twelve percent (seasonally adjusted) reported unfilled job openings, down 3 points. Over the next three months, 10 percent plan to increase employment (down 1 point), and 11 percent plan to reduce their workforce (up 4 points), yielding a seasonally adjusted 2 percent of owners planning to create new jobs, 1 point lower than June, leaving the prospect for job creation bleak.
Small businesses, the engines of economic recovery, are not recovering. The NFIB's economist puts it this way:
"At the two year anniversary of the expansion, the Index is only 3.4 points higher than it was in July 2009. And considering the confidence-draining performance of policy makers, there is little hope that Washington will stop hemorrhaging money and put spending back on a sustainable course. Perhaps we might begin referring to the 'Small-Business Pessimism Index' from now on."
