Not surprisingly the National Federation of Small Business Report showed a decrease from last months lack of optimism. While ADP reports numbers that are somewhat misconstrued, since they consider a person that works 1-hour in a month as employed, the real tale is to be told by the small businesses that are surveyed each month by the NFIB.
From the report:
“NFIB’s monthly Small-Business Optimism Index dropped one tenth of a point (0.1) in June, settling at 90.8, an unsurprising reading, basically unchanged from the previous month and solidly in recession territory. While some indicators rose slightly – including expected capital outlays – pessimism about future business conditions and expected real sales gains tugged the Index down, causing a small but disappointing drop in the Index for the fourth consecutive month. Although June marked the second year anniversary of the recovery, it appeared there was little happening to make small business owners optimistic.“
“Small-business owners are registering a vote of ‘no confidence’ in the federal government,” said NFIB Chief Economist Bill Dunkelberg. “Between the deluge of new regulations and a Washington policy agenda that is largely ignorant of Main Street needs, stubbornly low consumer spending, and grave concern among small firms about the federal budget, there is not much to be optimistic about as a small-business owner. Who can blame the prevalence of pessimism when administration officials are telling Congress that small businesses need to pay more in taxes to support government spending programs?”
“Earnings trends for small businesses remained distressingly negative in June, particularly given that the recovery is now beginning its third year. According to today’s report, 69 percent of the owners view the current period as a poor time to expand and 75 percent of those blame the weak economy for their outlook, while 10 percent cite political uncertainty.”
I really don’t have much to add to the report except for the fact that if “Poor Sales” are a primary concern of small businesses then what incentive do they have to hire new employees and expand their business. This is why that for all the efforts of government stimulus programs, bailout programs, etc. there has been negligible economic growth. Furthermore, the ideas of raising taxes, cutting spending in the wrong areas and trying to crucify the very same individuals (those making $250k and up that make up the majority of small business owners) will keep unemployment hire and the economy mired near recessionary levels.