Small business confidence index improves
According to the The National Federation of Independent Business (NFIB) Small Business Confidence Index1, although data reveals a slight improvement in February as the index rose to 1.9 points to 90.8, the group warns the increase cannot be classified as a “surge.” While small businesses surveyed were more optimistic about the economic outlook for the future, the NFIB says expected business conditions remain “deep in recession territory.”
Small businesses’ outlook toward capital investments and inventory building both saw improvement, pulling the overall index up enough to point to an improving outlook in general. Job openings improved, which the Federation said is “a strong indicator of an improvement in the unemployment rate,” which has been slowly improving. The readings reflect an economy that has bottomed out and is making slight improvements as it begins to dust itself off before it recovers.
Congress and Obama both criticized
NFIB Chief Economist Bill Dunkelberg said in a statement, ““While the Fortune 500 are enjoying record high earnings, Main Street earnings remain depressed. Far more firms report sales down quarter over quarter than up. Washington is manufacturing one crisis after another—the debt ceiling, the fiscal cliff and the sequester.”
Dunkelberg added, “Spreading fear and instability are certainly not a strategy to encourage investment and entrepreneurship. Three-quarters of small-business owners think that business conditions will be the same or worse in six months. The Index gained almost 2 points last month; that was good news. But, until owners’ forecast for the economy improves substantially, there will be little boost to hiring and spending from the small business half of the economy.”
The advocacy group was also highly critical of President Obama, putting most of the blame on his shoulders. “He is clearly not in the mood to compromise much even though consumers are not happy with policy,” also stating that “he has chosen cuts that will maximize the pain felt by the citizens, refusing the opportunity to actually lead ad manage the cuts more sensibly. But he has nothing to say about the pain he inflicts on the producers of jobs that could help those who are unemployed and want to work.”