Twenty two months from the December 2007 start of this downturn, the National Federation of Independent Business (NFIB) – “The Voice of Small Business” – reports that “Poor Sales” remain the single biggest problem facing small business owners. And it has now reached a new record, hitting 33 in this most recent report.
Although credit is harder to get, “financing” is cited as the “most important problem” by only four percent of NFIB’s hundreds of thousands of member firms. Although a nice gesture, enhancing SBA lending programs will not help much – too many owners
Statistically, we are in a huge “V” recovery, with Gross Domestic Product rebounding from a 6.4 percent decline in the first quarter to 3.5 percent growth in the third. That is quite a “comeback,” a very steep “V.” But unless the consumer comes back, the recovery is likely to turn into the “square root recovery,” slower, flatter growth on the recovery leg of the V.
Overall, the Optimism Index rose by 0.3, from 88.8 to 89.1, essentially unchanged from where it was in May (88.9), and only slightly above where it was one year ago in October 2008 (87.5).
There is no wage pressure reflected in the report, and it’s clear that deflation is a greater concern than inflation with regard to pricing.
In short, the large company/small company decoupling seems to be continuing apace.
