If it takes "animal spirits" to spur economic growth, by at least one measure the small business community is growing increasingly concerned and may find it tough to raise their spirits and rekindle what it takes to advance the economy. That's part of the overall assessment delivered today by the Chief Economist of the National Federation of Independent Business, following survey results from January.
Bill Dunkleberg's NFIB report on Small Business Economic Trends shows a fall off in the Small Business Optimism Index, driven largely by two important factors: expected business conditions in six months and expected real sales. Dunkleberg calls both issues, "Important determinants of decisions to hire, to expand business operations and to order new inventory," all of which are important drivers of economic growth.
The Index of Small Business Optimism fell 1.3 points from December, falling to 93.9. The NFIB Trends report says, "Neither the tumultuous stock market, nor the Federal Reserve's rate hike left much of a mark on small business owners beyond a frown in the Index represented by a further weakening of expectations for business conditions and expected real sales volumes."
The report additionally shows that 52-percent of the respondents reported hiring or trying to hire, which was down 3-points, but 45-percent reported few or no qualified applicants for the positions they were trying to fill.
Fully 61-percent reported capital outlays in January, down 1-point, while overall capital spending eased compared to later in 2015 where there was a surge in spending in anticipation of a revival of the expensing allowance.
The NFIB report also showed earnings trends basically unchanged.
Dunkleberg's commentary included in the report says "Politicians are promising 'free stuff' but that means less freedom to Main Street that will be expected to pay for it." He also points to "talk of 'negative interest rates,' a very foreign and confusing concept to Main Street."
The Economic Trends Report is filled with graphs depicting the latest feelings on employment plans, capital outlays, increasing inventories, economic expectations, real sales projections, credit conditions, feelings regarding potential for expansion, earnings trends and more.
You can see the full, comprehensive 21-page report by clicking the link below: