The partial government shutdown dealt a blow to small business confidence in October, according to the latest NFIB index.
The National Federation of Independent Business’ Small Business Optimism Index dropped 2.3 points from September to October, falling from 93.9 to 91.6. Seven of the ten index components measured by the NFIB were negative in October; only three were in the red the previous month.
“Washington paralysis is never good news for the economy, so it was no surprise that while politicians were arguing over whether or not the government should remain fully operational, small-business optimism measures deteriorated,” said NFIB chief economist Bill Dunkelberg in a statement released Tuesday morning. He added that stock market gains mean little to small business owners who are struggling with overregulation, increased taxes, weak sales and a floundering government.
The September survey responses were received a week before the shutdown, while the October survey was mostly conducted by the third week of October, during which the shutdown debate was in full force.
Moving away from the government shutdown, Dunkelberg said the biggest concerns are health-care reform and economic policy, both of which have major implications for small business owners. A recent NFIB survey indicated that rising health-care costs have been the no. 1 business concern for small business owners for the past 30 years.
With regard to economic policy, Dunkelberg takes issue with the ongoing policy of quantitative easing.
“Shoving too much fuel into the engine can produce a stall. Certainly job growth is not responding, only the counter-factual could justify keeping the foot on the gas pedal,” said Dunkelberg. Plans to increase employment fell four points in October from the previous month, while positive attitudes toward expansion fell two points.
The October NFIB report is based on survey responses from 1,940 randomly sampled members of the NFIB.
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