Despite Rise, Headwinds Remain
The NFIB’s Small Business Optimism Index rose
slightly in January to 94.1, but remains below the pre-recession average of
100. While business owners are more positive about their own sales and plan
more hiring (with the strongest job creation plans since 2007), they also still
see inventories as too high, and sales and earnings trends continue to drop.
Overall, the index is little changed. NFIB chief economist Bill Dunkelberg
said, “Employment starts 2014 over a million below its peak in January 2008 and
prospects for a major recovery in jobs are not good. NFIB labor market
indicators have recently seen a return to normal (but not expansion) levels,
encouraging in that reversals are now less likely. The average increase in
workers per firm has also risen in recent quarters, indicating new job
creation. However, there are far fewer firms hiring workers than there were in
2007 and many of those still in existence have downsized.”
Still, at least
some of the media believe that small businesses seem to be on the upswing,
reporting on the three consecutive months of increases. In addition, some media
argue more small-business hiring could turn around the recent lackluster
national employment reports.
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.