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Small business optimism falls

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Small business optimism falls

“Going nowhere, and not quickly.”

The National Federation of Independent Businesses reported today that optimism among small business owners “collapsed” during November, with its Index of Small Business Optimism falling 1.3 points after three months of remaining basically flat.

“During this holiday season, small business owners are finding little to be hopeful or optimistic about including the economy in the New Year,” commented NFIB Chief Economist Bill Dunkelberg. “This month’s Index continues to signal a lackluster economy and shows that the small business sector has no expansion energy whatsoever.

All we can do at this point is hope for a more business-friendly New Year."

“Uncertainty in DC, federal agencies playing politics and a President that is willing to punish the current economy for inconsequential environmental benefits in the future indicates that business conditions will not be revived anytime soon. Even though there is talk that the Fed will be raising rates this month, it will hardly signal that they are feeling more optimistic about the economy.

“Overall, the outlook remains the same with a slow 2 percent-ish growth and there is still not much pressure on prices from Main Street. All we can do at this point is hope for a more business-friendly New Year."

Employment and compensation expectations were something of a mixed bag, with a healthy 55% of companies reporting hiring or an attempt to hire, but 47% reporting few or no qualified applicants for the positions they were trying to fill. Sixteen percent reported using temporary workers, up 2 points. Twenty-seven percent of all owners reported job openings they could not fill in the current period, unchanged over the past 2 months. This is a solid reading historically and suggests no significant change in the unemployment rate. A seasonally adjusted net 11% plan to create new jobs, unchanged. A seasonally adjusted net 23% of owners reported raising worker compensation, up 2 points and at an expansion high. The net percent planning to increase compensation rose 3 points to a net 20%, historically strong for this recovery.

For the full report, click here.

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