Small businesses are feeling ever-so-slightly merrier this holiday season – but the long-term picture remains gloomy.
The NFIB Small Business Optimism Index saw a 0.9 increase in November, landing at 92.5. Eight of the index’s ten components were in the green last month, though most had weak gains.
Despite the green arrows, the NFIB says the future doesn’t look bright for Main Street.
“The year is not ending on a high note in the small-business sector of the economy. The ‘bifurcation’ continues with the stock market hitting record high levels, but the small-business sector showing little expansion beyond that driven by population growth,” said NFIB chief economist Bill Dunkelberg in a statement released Tuesday.
Dunkelberg said uncertainty continues to plague small business owners – especially when it comes to taxes, regulations and health-care costs.
“There is also a hint that employers are getting an inkling of what ObamaCare might mean for labor costs; concern about the cost and availability of insurance bumped up three percentage points after a long period of no real change,” said Dunkelberg.
Hiring Turns Positive
There’s good news for job-seekers, however, as hiring plans ticked up last month. Small business owners increased employment by a seasonally adjusted 0.05 workers per firm, and 14% reported adding an average of nearly 4 workers over the past few months. Nearly one in ten small businesses say they plan to add jobs in the future.
More small business owners said they also weren’t able to fill their already open positions last month – which the NFIB reports is a good sign for the unemployment rate. This figure was up 2 points, landing at 23% -- the highest reading since Jan. 2008.
Additionally, there was a 2% decrease in small businesses using temporary workers in November. This is promising, because economists have expressed concerns that the ObamaCare employer mandate, set to go into effect in 2015, will lead to a rise in temporary jobs.
Mixed Picture on Financial Future
The index components painted a confusing picture of how small business owners were feeling about the future.
“If these were publically traded companies, the stock indices would not look good. The economy remains bifurcated, large firms doing fairly well, small businesses showing little growth or improvement,” read the report.
There were drops in expectations about the economy and earnings trends, but at the same time, there were slight increases in predictions surrounding real sales. Additionally, 9% of business owners say now is a good time to expand – marking a three-point increase.
The November index is based on responses from 762 randomly sampled businesses belonging to the NFIB. The survey was conducted throughout the month of November.
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