Published Friday, October 11, 2019 at: 7:00 AM EDT
Despite a 1.3% decline in September, the survey of small-business owner optimism, conducted and indexed by the National Federal of Independent Business monthly since 1986, remains high by historical standards. That's a strong positive fundamental amid a long list of uncertainties about the Federal Reserve's next move, trade war with China, pending impeachment of President Trump, European weakness, Brexit, and an inverted yield curve.
Of a sample of 5,000 small-business owners, the 603 usable responses returned showed a decline to 101.8, a 1.3% drop from August's reading of 103.1, according to the NFIB's release on Tuesday.
Small businesses create 60% of new jobs, and a recession is highly unlikely when business-owners are confident. Business owner sentiment impacts wage gains, investment, and jobs. In the long arc of its 42-year history, September's drop was nothing like the collapse in confidence preceding previous recessions.
"As small business owners continue to invest, expand, and try to hire, they're doing so with less gusto than they did earlier in the year, thanks to the mixed signals they're receiving from policymakers and politicians," said the NFIB's Juanita D. Duggan. "All indications are that owners are eager to do more, but they're uncertain about what the future holds and can't find workers to fill the jobs they have open."
One of the economic uncertainties clouding the future appeared to grow less threatening on Friday, when significant progress was reported in U.S. trade talks with China. The Standard & Poor's 500 index on Friday surged by 1.1% to close at 2,970.27, just 2% from its all-time closing high.
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