Harsh Winter Weather Seen As Culprit
The National Federation of Independent Business
reported on Tuesday that its Small Business Optimism Index fell to 91.4 in
February from 94.1 in January. That matches other recent economic reporting,
which suggested that the harsh winter that had enveloped much of the nation had
taken a toll on the nation’s economy. However, the report showed that even
areas of the country not impacted by the weather showed weakness.
NFIB Chief
Economist Bill Dunkelberg said of the index, “Uncertainty is a major cause of
the Index’s dip. Lacking any progress in Washington and facing continued
unknowns with the healthcare law, the EPA, the minimum wage, tax reform and
more, it is no surprise that the Small Business Optimism Index fell, reversing
a few months of modest gains. As long as uncertainty remains high, owners will
remain cautious when it comes to increasing inventory. Business owners aren’t
going to bet their money on a future they cannot see clearly.” He added that
the “plunge in expectations for improvements in real sales in the coming months
and for business conditions 6 months from now, show that we shouldn’t expect
blue skies soon.”
What It Means:
The NFIB data reinforces
the general perception that the economy hit a rough patch this winter. The end
of winter will show in coming months whether this was due to the weather, a
broader array of problems, or both. Despite the pessimism, economists surveyed
by Bloomberg still expect the economy to grow at a 2.9% rate for all of 2014,
then accelerate some in the coming years.
Further Reading:
The NFIB report is posted online, while
other reports and analysis of the data can be found in the Wall
Street Journal,
Investors
Business Daily,
Bloomberg
BusinessWeek,
and CBS News.
This news article is intended to keep small business owners apprised of current events that may affect them. It does not necessarily reflect NFIB’s policy position on such issues.
