It may be a new year, but Main St. is seeing more of the same, according to the National Federation of Independent Business. Small business optimism ticked up in January, but just barely, according to the NFIB's latest optimism index.
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The gauge increased 0.2 points over December’s reading to 94.1 last month. “Statistically it didn’t move much,” says NFIB chief economist Bill Dunkelberg. “Technically, it’s gone up for three months, but the first was the biggest, the next was smaller and this new [increase] is barely measurable.” Dunkelberg says it will take serious changes to move the needle in a positive direction. “I didn’t expect a change, really, because nothing really happened with the things that are important to small business, like tax reform,” says Dunkelberg. And the latest delay of the ObamaCare employer mandate won’t cut it. “A delay is not what’s interesting to them, because small business doesn’t work on one-year plans. They are multi-year thinkers and planners, because when it comes to capital spending and employees, it takes the first year to break even on a new employee,” says Dunkelberg.Mixed Signals from Small Business Despite the lukewarm reading, January’s survey saw some bright spots. Small business owners’ expectations regarding their own sales jumped seven points since December. “It’s a really interesting net increase in business owners thinking real sales are going up, and it’s good news, because they don’t think the economy is going to be better,” says Dunkelberg. Additionally, more owners are looking to hire, with job creation plans at their strongest level since 2007. And while sales expectations are on the rise, many business owners say their inventories are too high – a troubling sign, according to Dunkelberg. “Capital spending numbers are also going down, and only 8% of firms think now is a good time to expand,” says Dunkelberg. He says that number would have to double in order to cheer up Main St. The NFIB January Index is based on responses from 1,884 NFIB members who were surveyed throughout the month of January.