The December NFIB Small Business Optimism report was released yesterday, December 11. The headline of the Press Release is “Small Business Owner Confidence Plunges More than 5 Points.” The subtitle is “One of the lowest optimism readings in survey history.”
The Index of Small Business Optimism fell by 5.6 point in November to 87.5.
Here are some excerpts from the Press Release that I find particularly notable:
The most significant factor impacting the decline in optimism is the expectation that future business conditions will be worse than current ones. The net percent of owners expecting better business conditions in six months fell 37 points to a net negative 35 percent. In October, the percent of owners who said they were uncertain as to whether business conditions would be better or worse in six months hit a record low of 23 percent. Many of those who were uncertain about the economy in October became decidedly negative in November; 49 percent of the owners now expect business conditions to be worse in six months, while 11 percent still express uncertainty about the future.
In the history of the monthly Index, only seven readings were lower, all but one in the last few months of 2008 and early 2009, the depths of the last recession. Prior to 1986 (when the survey was conducted on a quarterly basis), there were just two readings lower, 1975Q1 and 1980Q2.
Twenty-three (23) percent of owners still cite weak sales as their top business problem; this is historically high but down from the record 34 percent reading last reached in March 2010.
Also, a chart of the NFIB Small Business Optimism chart, as seen in Doug Short’s December 11 post titled “Small Business Sentiment: ‘Confidence Plunges More than Five Points’.”
(click on chart to enlarge image)
The Special Note summarizes my overall thoughts about our economic situation
SPX at 1427.84 as this post is written