Small business owners can’t anticipate the direction of the economy, don’t know whether it’s a good time to invest, and aren’t sure whether to hire new workers, according to the latest NFIB Uncertainty Index, which was released this week.
The Uncertainty Index derives from the NFIB Small Business Economic Trends Report, a monthly survey of NFIB members that we have conducted for 42 years. Within the survey is a series of questions that ask small business owners about the future, such as: whether now is a good time to expand, whether they expect the economy to improve, and whether they plan to hire. Under normal circumstances, small business owners can anticipate near-term conditions and decisions. These aren’t normal circumstances.
The volatile presidential election and the controversial nature of the two major candidates are driving the NFIB Uncertainty Index off the charts. The reading for October set an all-time high, smashing the record
set in the previous month. Small business owners cannot anticipate future government policies, such as tax rates, healthcare costs, and regulatory complexity. Small businesses are paralyzed.
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All of that uncertainty is a drag on the economy. It creates indecision. Small business owners who cannot reasonably anticipate government policies or economic conditions are unwilling to deploy capital, hire new employees, borrow money, or make any long-term financial decisions. The result is economic inertia, a near-shutdown of the kind of business activity that produces growth, new jobs, and wider prosperity.
This tumultuous campaign, which will end next Tuesday, may have been good for television ratings and political consultants, but it’s been very hard on small business owners, and its effects are rippling through the economy.
Juanita D. Duggan, NFIB President & CEO