If the American economy is improving, you won’t find much evidence within the data linked to small businesses. Gene Epstein delivers that message in his latest Barron’s “Economic Beat” column.
The great recession of 2008-09 officially ended in second quarter ’09, with economic growth resuming the following quarter. But small business still seems to be struggling to pull out of recession. Based on the Index of Small Business Optimism (chart), as tracked by the 340,000-member National Federation of Independent Business, you’d hardly know the economy was even modestly expanding. …
… William Dunkelberg, the NFIB’s chief economist, believes that fear about the future is a problem right now. While he calls slow growth in the overall economy the major drag on small business, he cites another survey of constituents revealing that “uncertainty over economic conditions” and “uncertainty over government actions” are both high on the list of concerns.
Addressing what he believes “uncertainty” means to business people, Dunkelberg uses the example of planning a picnic: “If the weather report put the odds at 50-50 of clouds or sun, you’d plan the picnic anyway. But what if odds were 50-50 of sun or tornadoes and thunderstorms?”
That kind of weather seems to include related fears over taxes, soaring federal debt, and the potential cost of Obamacare. Unless those fears begin to lift, small business will probably remain in its funk.
