Small Business Owners' Optimism Falls Again
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Earlier today, we reported that women business owners are more optimistic about the economy, but NFIB says that overall, small business owners are less optimistic than last month. The NFIB's Index of Small Business Optimism fell 0.3 points in May to 90.9, marking the third monthly decline in a row. The recession-level reading has been attributed to a number of causes: 1 in 4 owners still report weak sales as their top business problem, consumer spending is weak, especially for “services,” a sector dominated by small businesses and inflation is a growing concern now with 1 in 10 citing this as their most serious business problem.
According to NFIB chief economist Bill Dunkelberg:
"Corporate profits may be at a record high, but businesses on Main Street are still scraping by. Washington is throwing misdirected policies at the problem, offering tax breaks for hiring and equipment investment, but acting surprised when they don't bear any fruit," said NFIB chief economist Bill Dunkelberg. "The failure to understand why small-business owners are not hiring or investing has resulted in a set of policies that have not been very effective, and Main Street is suffering. The icing on the cake: the growing debt, large deficits, threats of higher taxes, regulations being spewed out by state and local administrations, and the uncertainty of the new health care law--is it any wonder that optimism is down?"
The news also had Belmont University's Dr. Jeff Cornwall worried:
No new jobs. No new capital spending. Increasing prices even though sales continue to be sluggish. Not a very encouraging set of economic indicators coming out of small business, which spells no recovery in our foreseeable future.