Businesses still reeling from uncertainty
According to the National Federation of Independent Business’ (NFIB) Small Business Optimism Index for October out today, confidence fell 2.3 points in October compared to September, with the government shutdown and Obamacare debate plaguing businesses with persisting uncertainty, an uncertainty which has impacted the optimism index for many months.
In September, three of the ten components measured by the NFIB were negative – fast forward just one month, and seven are in negative territory.
“Washington paralysis is never good news for the economy, so it was no surprise that while politicians were arguing over whether or not the government should remain fully operational, small-business optimism measures deteriorated,” said NFIB chief economist, Dr. Bill Dunkelberg.
Dunkelberg also notes that gains in the stock market mean very little to small business owners who report they are struggling with rising taxes, overregulation, weak sales, and political uncertainty.
The government shutdown, forecasting for 2014
While the government shutdown has impacted small business optimism levels, Dunkelberg adds that the biggest concerns are health care reform and economic policy, with rising heathcare costs as the top business concern for small business owners for the past three decades.
Regarding economic policy, Dunkelberg focused on quantitative easing, stating, “Shoving too much fuel into the engine can produce a stall. Certainly job growth is not responding, only the counter-factual could justify keeping the foot on the gas pedal.”
The NFIB reports that positive attitudes toward expansion fell two points from the previous month, while plans to increase employment actually fell four points – unwelcome news to an economy that is grasping at recovery straws.
“The new budget deadline of January 15, 2014 is approaching quickly and Congress continues to wrangle over the disastrous healthcare law and little else. We shouldn’t expect skies to turn blue anytime soon,” Dunkelberg concluded.