Small business confidence edges up
Small business optimism improved 0.2 points from December, landing at 94.1 in January, but well below the pre-recession average of 100.
According to the National Federation of Independent Business (NFIB) latest index, owners did find a reason to be more positive about their own sales (a huge seven point jump in positive expectations) and plan more hiring, with the strongest job creation plans since 2007. However, owners continue to find inventories “too high” and sales and earnings trends continued to deteriorate for more owners. Overall, the Index is still just treading water.
“Employment starts 2014 over a million below its peak in January 2008 and prospects for a major recovery in jobs are not good," NFIB chief economist Bill Dunkelberg said. "NFIB labor market indicators have recently seen a return to normal (but not expansion) levels, encouraging in that reversals are now less likely. The average increase in workers per firm has also risen in recent quarters, indicating new job creation. However, there are far fewer firms hiring workers than there were in 2007 and many of those still in existence have downsized. As the midterm elections heat up, economic policy will be dominated by campaigning, not sensible strategies to improve economic growth and job creation. This will, barring a surge in economic activity undoubtedly worsen unemployment and job opportunities in the future.”
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