Latest U.S. Labor Dept. numbers not telling the whole story. Main Street still hurting
SACRAMENTO, Calif., Aug. 10, 2021—Release today of the nation’s bellwether measurement of the Main Street economy showed a worrisome drop in optimism among the nation’s small-business owners, prompting the California state director for the association that takes the monthly poll to remind policymakers that much more will be known after Labor Day.
“Glad to see big businesses starting to hire again, but on the Main Streets of America, it’s a different story,” said John Kabateck, California state director for the National Federation of Independent Business (NFIB), which produces the monthly Small Business Economic Trends report, also known as the Optimism Index. “Our membership are those small businesses that have between five and 10 employees and right now, they are having historic struggles filling job openings. Add to that, growing supply chain problems with inventory.
“As to what condition they will be in come fall, a lot will be determined by the Labor Day end of the extra $300 a week the federal government has been larding on top of state unemployment benefits, which for some has created a perverse disincentive not to return to work, which one poll found to be one of the top four reasons some are waiting it out.”
From NFIB Chief Economist Bill Dunkelberg
“Small business owners are losing confidence in the strength of the economy and expect a slowdown in job creation. As owners look for qualified workers, they are also reporting that supply chain disruptions are having an impact on their businesses. Ultimately, owners could sell more if they could acquire more supplies and inventories from their supply chains.”
From NFIB’s National News Release
The Optimism Index decreased in July to 99.7, a decrease of 2.8 points, reversing June’s 2.9-point gain. Six of the 10 components declined, three improved, and one was unchanged. Other key findings include:
- Sales expectations over the next three months decreased 11 points to a net negative 4% of owners.
- Owners expecting better business conditions over the next six months decreased eight points to a net negative 20%.
- Earnings trends over the past three months decreased eight points to a net negative 13%.
About the Small Business Economic Trends (SBET) report
The NFIB Research Center has collected Small Business Economic Trends data with quarterly surveys since the 4th quarter of 1973 and monthly surveys since 1986. Survey respondents are drawn from a random sample of NFIB’s membership. The report is released on the second Tuesday of each month. Today’s survey was conducted in July 2021.
The SBET’s primary value is anticipating short-run fluctuations in economic activity. An additional value of the SBET is its measurement of small business activities and concerns over time. The benefit of a longitudinal data set offers an invaluable perspective on how policies and business cycles impact small businesses over time. The SBET is one of the few archival data sets on small business, particularly when research questions address business operations rather than opinions. Today, it’s the largest, longest-running data set on small business economic conditions available.
Keep up with the latest on California small-business news at www.nfib.com/california, where this release can also be read, or by following NFIB on Twitter @NFIB_CA or on Facebook @NFIB.CA.
For 78 years, NFIB has been advocating on behalf of America’s small and independent business owners, both in Washington, D.C., and in all 50 state capitals. NFIB is a nonprofit, nonpartisan, and member-driven association. Since its founding in 1943, NFIB has been exclusively dedicated to small and independent businesses and remains so today. For more information, please visit nfib.com.
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