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NFIB confidence index improves, but still low
Small businesses became slightly more confident in January, according to an industry index, but remain largely pessimistic about conditions.
The National Federation of Independent Business (NFIB) said its optimism index ticked up for a second consecutive month in January, landing at 88.9.
NFIB's index had tanked in November, due to small business concern over the scheduled tax increases and spending cuts that were scheduled for the beginning of 2013.
Even with January's increase, the NFIB index remains lower than it was between October 2011 and October 2012.
Bill Dunkelberg, the small-business group's chief economist, said in a statement that it made sense that companies would be feeling down, noting that recent estimates said the U.S. economy had also slightly contracted in the last quarter of 2012.
"If small businesses were publicly traded companies, the stock market would be in shambles," Dunkelberg said. "While corporate profits are at record levels as a share of GDP, small businesses are still struggling to turn a profit."
"The president will address the state of our nation tonight, but he apparently won’t have much that’s positive to relay to our small-business community — not while the pall of uncertainty over economic policy continues to depress investment spending and growth," he added.
Senate Democrats are currently working on a package of cuts and revenue increases to roll back the sequester. House Republicans – who passed two sequester replacement measures that expired at the start of the new Congress – have said they are waiting on the Senate and the White House.
According to the NFIB index, small-business owners remain overwhelmingly pessimistic about future business conditions, even with a slight improvement over the previous month.
Owners are also reporting declining sales and reduced inventories, the index found.
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