You Should Know The Real Reason That Small Business Optimism Collapsed In November

The big economic news this morning is that the National Federation Of Independent Businesses survey shows a HUGE November collapse in Small Business Optimism.

So what’s the story here?

It’s really simple.

Check out this Gallup chart of general economic confidence broken down by political party. Republicans say they’re way less optimistic about the economy than Democrats and independents.

Not only that, the gap has been widening.


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And the split was exacerbated post-election, according to IBD-TIPP:

The partisan breakdown for optimism is telling. Not surprisingly, sentiment among Democrats improved — 4.2%, from 70.8 in October to 73.8 in November.

But Republican poll respondents, who for months were below the break-even level of 50 for optimism , expressed an even gloomier outlook over the economy’s future.

The optimism index for this group plunged 41.1%, from an already-low 42.1 in October to 24.8 in November — the lowest reading ever for Republicans.

So basically, opinions about economic optimism are politically driven.

And it’s known that small business owners were overwhelmingly Romney supporters.

So when you’re polling small businesses, you’re just asking a sub-set of Republicans. And we already know Republicans are pissed, and so naturally small businesses got more upset. No real news.

For more on the small business optimism collapse, see here >