When the country recovered from recessions in the past, small businesses were usually the first companies to start hiring. But smaller companies are so pessimistic now that they’re not taking on their usual leadership position.
The National Federation of Independent Business, which issues a monthly report on small business optimism, says “confidence in the future of the economy crashed in August, and that the small business half of the economy is still in the “tank.’”
Fewer survey participants said their sales were rising and more said sales were falling than in July. Thirty-four percent of owners surveyed said they expect their sales to fall in the next three months. Twenty-one percent expected sales to rise, and 45 percent expected them to be unchanged. Employers are unlikely to hire if they’re unsure that they’ll have the sales to justify a larger staff.
The NFIB said 11% of the owners it surveyed in August planned to create jobs in the next three months. 12% plan to cut jobs, and 77% plan no changes.
The group said those readings are at the low levels seen during a recession. It predicted that the “unemployment rate could ease a fraction or remain unchanged” at 9.1 percent. According to the NFIB survey, only 7 percent of business owners expect business conditions to be better six months from now. Forty-one percent expect them to be worse, and 52 percent expect them to be unchanged.
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