Small business index inches up ever so slightly

Small-business optimism remained essentially flat in January, according to a new industry index.

The National Federation of Independent Business said on Tuesday that its monthly small-business optimism index landed at 93.9 in January, an increase of 0.1 point from December.

Bill Dunkelberg, NFIB’s chief economist, said in a statement that the index illustrated that small businesses believe Washington is deadlocked, with showdowns over budgets and little fiscal discipline.

“The most positive statement that can be made about January’s reading is that the Index did not go down; a change of 0.1 points is essentially no change and it is hardly indicative of a surge in economic activity,” Dunkelberg said.

Still, there have been some positive economic reports released in recent weeks — a development that Democrats have latched on to in this election year.

The U.S. economy, for instance, added 243,000 jobs in January, and the unemployment rate is now back at 8.3 percent, where it was in February 2009. Gallup also announced Tuesday that its economic confidence index was at its highest point since last February.

At the same time, the economy was also seen to be taking encouraging steps last winter. But that momentum eventually slowed, something analysts have blamed on, among other things, higher oil prices caused by unrest in the Middle East and the earthquake and tsunami in Japan.

For its part, NFIB, a key small-business advocate, also points out that its optimism index is very close to where it was in January 2011 (94.1), and essentially called 2011 a stagnant year for small-business confidence.

The NFIB optimism index topped out at 94.5 last February, before falling for six consecutive months. January’s index now marks the fourth consecutive month of increases, and the index is at a higher point than it was for all of 2008, 2009 and 2010.

NFIB said Tuesday its index also suggested that the January jobs numbers could be revised downwards. The group says that 78 percent of smaller companies made no net change to employment last month, with 11 percent of owners adding jobs and the same number shedding them.

On Capitol Hill, Rep. Sam Graves (R-Mo.), the chairman of the House Small Business Committee, used the index to push Senate leaders to pass economic measures that have already cleared the House.

“Although it is encouraging to see the monthly unemployment rate slowly improve, today’s NFIB Optimism Report is another sign that small businesses are still uncertain about the economy and their company’s growth outlook,” Graves said in a statement.

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