While first quarter indicators were alarming, there are deeper trends at work than the initial numbers show. NFIB Chief Economist Bill Dunkelberg wrote two opinion pieces published by Forbes analyzing recent small business data. 

With small businesses comprising nearly 45% of the American Gross Domestic Product (GDP), metrics measured by the NFIB Small Business Economic Trends survey are an effective barometer to understand greater economic trends. The data is clear—the economy is solid, even if it is moving at a slower pace.    

The editorials discuss how the Small Business Economic Trends data helps shape the bigger economic picture, with two particularly relevant GDP indicators being the Small Business Optimism Index and the Earnings Trends data.  

“The strength of the optimism index is its comprehensiveness: It is a composite of ten measures within the NFIB survey, making it a good overall business pulse. The strength of the earnings is its alignment to GDP, as it is most directly reflective of actual business activity,” said Dunkelberg. 

Dunkelberg’s Small Business Data article also explores the data from Q1 compared to the Great Recession, and there is stark contrast. Findings show that small business optimism and earnings data historically follow the state of the economy, and because those numbers show a healthy economy instead of a decline that even a mild recession would indicate, the outlook for Q2 and the year moving forward looks promising.   

Read the full opinion articles from July 28 and July 31 for a comprehensive understanding of the data behind several key economic indicators.