Small Business Optimism Ends 6 Month Decline, But Could Be A 'Blip'

The September NFIB Small Business Optimism Index came in at 88.9, beating the economists’ estimate of 88.5.  Last month it was 88.1.

Expectations for sales improved from last month, but are still unfavorable.  However, the NFIB warns that this isn’t anything to get too excited about.

Their press release:

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Small-Business Confidence Sees Modest Gain: The Start of a Trend, or a Blip?
WASHINGTON, October 11, 2011 – Small-business optimism gained 0.8 points in September, according to the National Federation of Independent Business’ (NFIB’s) latest Index, ending a six-month decline. However, NFIB’s chief economist cautions that in spite of this uptick, there is little among the 10 Index components that can be considered “positive.” Reports of owners expecting real sales to improve were higher than last month, but were still negative. Similarly, owners expecting better business conditions in six months increased modestly, but this reading also remained negative.

“An increase in consumer spending would be the best imaginable stimulus right now, not gimmicky Washington policies,” said NFIB Chief Economist Bill Dunkelberg. “Promising temporary tax cuts financed by permanent income tax increases will not help many small-business owners who pay taxes based on personal—not corporate—tax rates. The key to economic recovery is restoring the confidence of consumers; only then will small businesses begin to see the sales they need to expand. If consumers fear the path we are on, then ‘less is more’ policies that reduce the size of government will increase confidence.”

20-eight per cent of small-business owners reported that poor sales is still their top business problem. In fact, poor sales has been the top business problem for small-business owners for the past three years. The net per cent of owners expecting better business conditions in six months was a negative 22 per cent, up 4 points from August, but 32 percentage points lower than January. Not seasonally adjusted, 38 per cent expect deterioration and only 9 per cent expect improvement. 

NFIB September Small Business Optimism Index

Photo: NFIB

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