10 June 2013 23:45 [Source: ICIS news]
WASHINGTON (ICIS)--US small business owners were somewhat more confident in the nation’s economic recovery last month, a key survey said on Monday, but the small improvement does not suggest strong growth and hiring prospects are lower.
However, “while May’s reading is the second highest since the recession started in December 2007”, said the NFIB, “the index does not signal strong economic growth for the sector".
Although eight of the 10 subsidiary measures in the NFIB confidence index saw gains in May, the federation noted that plans by small business owners to hire more employees fell by 1% last month from April’s level.
Only 5% of small business owners plan to hire new employees in the near future, said the NFIB, and only 8% of owners think that this is a good time to expand their operations.
“Small business confidence rising is always a good thing, but it’s tough to be excited by meagre growth in an otherwise tepid economy,” said NFIB chief economist Bill Dunkelberg.
“Washington remains in a state of policy paralysis, and while the stock market sets records, GDP posts mediocre growth,” he said.
Dunkelberg noted that the US unemployment rate is at 7.6%, up marginally in June from May, “and it is departures from the workforce, not job creation, that is contributing to [the unemployment decline] when it does fall”.
“It’s nice to see confidence not shrinking, but there isn’t much to hang your hat on in this report,” Dunkelberg said.
“We are back to where we were in May 2012,” he added.
The well-being and confidence levels of the US small business sector are important because those entities - typically firms with 500 or fewer employees - account for 64% of the new jobs generated in the economy.
The NFIB represents some 350,000 ?xml:namespace>
Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy
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