Small-business index continues rise

Small businesses are becoming increasingly optimistic, but their confidence remains at comparatively low levels, an industry index found. 

The National Federation of Independent Business’s optimism index ticked up to 90.8 in February, a 1.9-point increase that the small-business lobby termed “a nice improvement.” 

But NFIB also noted that, even after three consecutive months of improvements, the index remains roughly level with the average in 2008, the year of the fiscal crisis. The index also remains below the levels reached during recessions over the past two decades or so. 

Bill Dunkelberg, NFIB’s chief economist, added that small-business earnings remain low, especially compared to the record earnings currently being reported by large corporations. 

“Washington is manufacturing one crisis after another — the debt ceiling, the fiscal cliff and the sequester. Spreading fear and instability are certainly not a strategy to encourage investment and entrepreneurship,” Dunkelberg said in a statement. 

“Until owners’ forecast for the economy improves substantially, there will be little boost to hiring and spending from the small business half of the economy.” 

Small businesses and big businesses also found themselves at odds during last year’s debate over the fiscal cliff, which led to a deal that raised the top individual tax rate to 39.6 percent. Many small businesses pay taxes through the individual code. 

The latest NFIB index comes just days after the federal government reported that the jobless rate had fallen to 7.7 percent, after the economy added 236,000 jobs in February. 

Most of the index’s components also increased in February, with the biggest boosts coming in plans for capital spending and higher inventories.

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