NFIB Small Business Optimism rises while only 1% of small business plan to hire

The NFIB small business optimism index rose to 88.8 in August from 88.1 in July as the net percentage small firms expecting the economy to improve recovered most of the prior month’s plunge, rising to -8% from -15%.

The employment components of the survey remained weak as the net percentage of small firms planning to hire fell to 1% in August from 2% in July.

BOTTOM LINE

While slightly less weak in August, small businesses remained quite pessimistic about the outlook and only a small positive balance of small firms were planning to increase employment in the month. Washington remains focused on access to credit as a way to improve small business conditions, but the percentage of these firms reporting credit was “harder to get” fell further in August and, at 12%, compares to 21% of small firms that cite “taxes” as their single most important problem and 15% of firms that cite “government requirements”.

Taxes and government regulation.  No wonder the employment picture is not improving.  While we are seeing blue chip companies and banks make massive profits, the engine for growth is still lagging.  Small businesses are scared.  Perhaps some of it comes from the distrust that has built up between the current government and small businesses.  Perhaps it is the tax increases that will come from the expiration of tax credits.  Either way, the engine for today's new hires is not working. 

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