Small Businesses More Optimistic

Gas prices in the United States go down, and optimism goes up.

Last month we saw that the small business optimism index was down. In fact, the drop was precipitous.

Well, the latest Small Business Optimism Survey rebounded by three points — pretty significant .

Small business hopes rebounded in September as the National Federation of Independent Business Small-Business Optimism Index rose 3.5 points to a more normal level of 99.4. “This confirms the slowdown in the economy anticipated in the July survey – down, but not out,” said NFIB Chief Economist William Dunkelberg. The Index, bouncing back to near its 30-year average, was lifted by positive movement among six components including the outlook for an improved economy, favorable earnings and higher sales. Inflation pressure also eased.

Job creation plans held firm at August’s near-record levels. Over the next three months, nearly one in five firms plan to create new jobs – down a point – while those planning workforce reductions fell two points to 7 percent, yielding a seasonally-adjusted net 17 percent of owners planning to add new positions, the highest reading since 2004 and unchanged from August.

The stock market is hitting new highs and small business optimism is not as negative as it seemed last month.

So what’s happening? The price of gas has a lot to do with our sense of whether things are going well and whether we have confidence in the economy. Gas prices have been coming down. In surveys where people are asked how they feel about the future, lower energy prices color our sentiments and make a big difference.

Of course, the economy has slowed down, as the latest figures show. But let’s keep it all in perspective — it is still a positive economy.

Anita Campbell Anita Campbell is the Founder, CEO and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses.