The National Federation of Independent Business Small Business Optimism Index rose 0.3 in October to 93.1; the slight uptick in the reading did not seem to indicate a dramatic shift in owner sentiment over the course of the month. The survey, conducted before the presidential election, found that the percent of owners uncertain about whether business conditions will be better or worse in six months, was at a record high (23 percent). This eclipsed the pre-recession record of 15 percent reached during the Carter Administration. NFIB’s forward labor market indicators weakened last month, and owner views of the future do not foresee much improvement in economic growth.
“While four of ten survey components rose, the Index still remains in solidly pessimistic—and recessionary territory,” said NFIB chief economist William Dunkelberg. “In the 40 months since the alleged ‘recovery’ started in July 2009, the Index has never exceeded a reading of 95; the pre-recession average for the Index is 100. The election is over and Washington looks much like it did on November 5th. The fear of stalemate among the small-business community is palpable, as the looming fiscal cliff and the threat of higher costs and more taxes are very real possibilities come January. Until then, not knowing the direction of the economy will always have a dampening impact on spending and hiring.”
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