Tags: Sentiment | Small | Businesses | Hire

Survey: Small U.S. Businesses Aren't Ready to Hire

Tuesday, 13 Apr 2010 10:02 AM

 

U.S. small business owners have little confidence in the economy and are in no rush to hire or expand, despite signs the recovery is picking up, a survey released on Tuesday showed.

The persistent pessimism poses a challenge for President Barack Obama, who has proposed a series of policies aimed at enticing small firms to add jobs. Such policies are critical in a congressional election year when voters are upset about high unemployment.

The National Federation of Independent Business said its monthly index of small business optimism fell 1.2 points in March to 86.8 and below 90 for the 18th consecutive month.

"The March reading is very low and headed in the wrong direction," said Bill Dunkelberg, NFIB's chief economist. "Something isn't sitting well with small business owners. Poor sales and uncertainty continue to overwhelm any other good news about the economy."

Small businesses normally account for the bulk of new jobs, making them an important part of the recovery. Obama has proposed tax breaks to encourage hiring and special lending programs to try to boost hiring.

The economy registered two consecutive quarters of economic growth to the end of 2009. It probably continued expanding in the first three months of 2010. But small business confidence remains abnormally low. Dunkelberg blames that in part on uncertainty about Washington's policies, particularly those related to taxes and health care.

"There is no legislation that has passed or that is promised that is encouraging to small business owners and the news about the fiscal crisis and the need for more taxes is hardly encouraging," the trade group said.

The jobless rate held at 9.7 percent in March, the third straight month, as the labor market continues to lag the economic recovery from the worst downturn since the 1930s.

"What small businesses need most are increased sales, giving them a reason to hire and make capital expenditures and borrow to support those activities," said Dunkelberg.

While the survey suggested small firms were done cutting jobs, plans to create new ones remain weak. In March, more firms were planning to reduce headcount than add to it.

Only nine percent of firms reported unfilled job openings on a seasonally adjusted basis, down two points from February and historically low. That showed little hope for a lower unemployment rate, the group said.

Small business owners continued to liquidate inventories and weak sales trends gave little reason to order new stock, the survey showed.

Historically weak plans to make capital expenditures to add to inventory and expand operations also make it clear many borrowers are simply on the sidelines, NFIB said.

© 2015 Thomson/Reuters. All rights reserved.

Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Toddler Wounds Both Parents with 1 Shot from Handgun

Sunday, 01 Feb 2015 09:09 AM

Authorities say a 3-year-old boy got ahold of a handgun from his mother's purse and fired just one shot that wounded bot . . .

Obama Budget Proposes $478 Billion Public Works Programs

Sunday, 01 Feb 2015 08:34 AM

President Barack Obama's budget will propose an ambitious six-year, $478 billion public works program of highway, bridge . . .

Arizona's Sheriff Joe Picks Patriots; Inmates to Get Popcorn

Saturday, 31 Jan 2015 23:21 PM

The Arizona lawman who bills himself as America's toughest sheriff predicts the New England Patriots will win the Supe . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved