Small Business Owners Refuse to Panic, Their Optimism Ticks Up

NFIB today released a special version of its decades-old monthly survey of Small Business Economic Trends. Before Monday, Sept. 15, there had been "dramatic improvements in the percent of small business owners expecting the economy to improve over the next six months and solid plans to invest in new inventories accounted for that early surge," said NFIB Chief Economist William Dunkelberg.
On Sept. 15, however, the investment banking firm Lehman Brothers filed for bankruptcy, dramatically illustrating the degree to which the nation's credit system was on the brink of collapse.After Sept. 15, small business optimism was hammered by the events in Washington and New York and the steady growing media coverage of the panic. The mood of small business owners turned markedly downward at that point and subsequently plans to create jobs and invest in inventories or capital expansion fell (reducing loan demand).
Despite that set back, the Index of Small Business Optimism rose 1.8 points to 92.9. However, 92.9 is still considered a recessionary level index, so September continues one of the longest strings of recession-level readings in the history of the survey that started in 1973.Still, it is heartening to see small business owners -- who understand the real Main Street economy better than those on Wall Street, believing in the continuing potential of their businesses.