Small Business Optimism Fades Despite Biden Admin Boasting Of ‘Record-Breaking Economy’

Small Business Optimism Fades Despite Biden Admin Boasting Of ‘Record-Breaking Economy’

by | Oct 15, 2023 | Economy, News

By Daniel Stefanski |

The current state of the American economy continues to trouble small business owners.

This week, the National Federation of Independent Business (NFIB) released its latest Small Business Optimism Index, showing a drop of a half point during the month of September. The index now stands at 90.8, and it has not risen above the average mark of 98 for 21 consecutive months.

NFIB Arizona State Director Chad Heinrich commented on the latest issuance of the index, saying, “It’s clear that small business owners remain deeply concerned about the economy. The pressure of inflation and the labor shortage are continuing to take a toll on our job creators, with little relief in sight.”

Bill Dunkelberg, NFIB’s Chief Economist, also weighed in on the recent numbers from his organization, writing, “Owners remain pessimistic about future business conditions, which has contributed to the low optimism they have regarding the economy. Sales growth among small businesses have slowed and the bottom line is being squeezed, leaving owners few options beyond raising selling prices for financial relief.”

The announcement from the Arizona arm of the influential business group stated that “twenty-three percent of owners reported that inflation was their single most important problem in operating their business, unchanged from last month and tied with labor quality as the top concern.”

NFIB highlighted some of the areas of emphasis from their index, including:

  • Small business owners expecting better business conditions over the next six months deteriorated six points from August to a net negative 43% seasonally adjusted, however, 18 percentage points better than last June’s reading of net negative 61% and definitely at recession levels. 
  • Forty-three percent (seasonally adjusted) of owners reported job openings that were hard to fill, up three points from August and remaining historically high as owners can’t hire enough workers due to few qualified applicants.
  • Seasonally adjusted, a net 23% plan to raise compensation in the next three months, down three points from August.
  • The net percent of owners raising average selling prices increased two points to a net 29% seasonally adjusted, still a very inflationary level.
  • The net percent of owners who expect real sales to be higher increased one point from August to a net negative 13% (seasonally adjusted), still a very dismal posture.

Just last week, the Biden Administration boasted of a “record-breaking economy,” noting the increase of jobs, an unemployment rate below 4%, a low unemployment rate for women, and low unemployment for African Americans, Hispanic Americans, and Americans with disabilities.

Others see the economy in an entirely different light. Alfredo Ortiz, the president and CEO of Job Creators Network, recently said, “This accelerating inflation, which is nearly twice the Federal Reserve’s target rate, is another Bidenomics blow to ordinary Americans and small businesses dealing with rapidly rising prices that are lowering their real wages and living standards for two and a half years.”

Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.

Small Business Report Draws Attention To Lack Of Optimism

Small Business Report Draws Attention To Lack Of Optimism

by | Jul 13, 2022 | Economy, News

By Terri Jo Neff |

The number of small business owners across America who expect business conditions to improve over the next six months dropped considerably in June, hitting the lowest level in the 48 years the National Federation of Independent Business has conducted the survey.

That was the dismal news released Tuesday by Chad Heinrich, NFIB’s state director for Arizona.

“With small-business-owner expectations dimming to a record low, it becomes even more important that we have state leaders focused on ways to improve business conditions for the small-business owner,” Heinrich said. “All Arizonans have benefited from state legislative and executive leaders who have adopted pro-small-business policies year-after-year.”

Heinrich’s statement drew attention to the NFIB’s Small Business Optimism Index for June which showed a drop for the sixth consecutive month. That means the expectations of small business owners for better conditions have worsened every month of 2022.

NFIB Chief Economist Bill Dunkelberg also addressed the pessimistic news revealed by the Small Business Optimism Index.

“On top of the immediate challenges facing small business owners including inflation and worker shortages, the outlook for economic policy is not encouraging either as policy talks have shifted to tax increases and more regulations,” Dunkelberg said.
 
Among the key findings in Tuesday’s report is that 50 percent of small business owners reported job openings that could not be filled, a historically “very high” rating. Of those hiring or trying to hire, 94 percent reported few or no qualified applicants for the positions they were trying to fill.

Even one bit of good news in Tuesday’s report wasn’t all that positive. According to NFIB’s Small Business Optimism Index, the net percent of owners raising their average selling prices decreased three points. However, the decrease comes after May’s record high reporting of price increases.

Heinrich advised that Arizonans cannot rest on the successes that have kept the state at or near the top of post-pandemic economic gains.

“We must continue to support leaders who understand that most new jobs are created by small business owners,” he said. “Small businesses drive the Arizona economy forward.”

The NFIB Research Center has collected Small Business Economic Trends data with quarterly surveys since the 4th quarter of 1973 and monthly surveys since 1986. Survey respondents are randomly drawn from NFIB’s membership.