Small Business Optimism is down
This latest supports our take that well connected "big" firms are benefitting more than the small business owner. Since most jobs are created in the small business sector, this can be a serious hindrance to the vitality of the economy.
- The NFIB small business optimism index declined to 86.8 in March from 88.0 in February. The percentage of firms planning to expand fell to 2% from 4%.
- Although the NFIB reported that job reductions have ended, hiring plans deteriorated as the net percentage of small firms planning to hire fell to -2% in March from -1% in February, while 9% of firms reported an available job opening (down from 11% in February).BOTTOM LINE: There remains a significant divergence between this measure of business confidence and the Conference Board’s CEO sentiment gauge, which suggests to us that economic recovery has benefitted larger businesses more than smaller ones. According to this survey, a poor sales environment remains the single most important problem for small businesses, followed by taxes and government requirements.