Small-Business Optimism Declines But Remains High
Published Friday, October 11, 2019 at: 7:00 AM EDT
Despite a 1.3% decline in September, the survey of small-business owner optimism, conducted and indexed by the National Federal of Independent Business monthly since 1986, remains high by historical standards. That's a strong positive fundamental amid a long list of uncertainties about the Federal Reserve's next move, trade war with China, pending impeachment of President Trump, European weakness, Brexit, and an inverted yield curve.
Of a sample of 5,000 small-business owners, the 603 usable responses returned showed a decline to 101.8, a 1.3% drop from August's reading of 103.1, according to the NFIB's release on Tuesday.
Small businesses create 60% of new jobs, and a recession is highly unlikely when business-owners are confident. Business owner sentiment impacts wage gains, investment, and jobs. In the long arc of its 42-year history, September's drop was nothing like the collapse in confidence preceding previous recessions.
"As small business owners continue to invest, expand, and try to hire, they're doing so with less gusto than they did earlier in the year, thanks to the mixed signals they're receiving from policymakers and politicians," said the NFIB's Juanita D. Duggan. "All indications are that owners are eager to do more, but they're uncertain about what the future holds and can't find workers to fill the jobs they have open."
One of the economic uncertainties clouding the future appeared to grow less threatening on Friday, when significant progress was reported in U.S. trade talks with China. The Standard & Poor's 500 index on Friday surged by 1.1% to close at 2,970.27, just 2% from its all-time closing high.
This article was written by a veteran financial journalist based on data compiled and analyzed by independent economist, Fritz Meyer. While these are sources we believe to be reliable, the information is not intended to be used as financial or tax advice without consulting a professional about your personal situation. Tax laws are subject to change. Indices are unmanaged and not available for direct investment. Investments with higher return potential carry greater risk for loss. No one can predict the future of the stock market or any investment, and past performance is never a guarantee of your future results.
This article was written by a professional financial journalist for Advisor Products and is not intended as legal or investment advice.
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