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Optimism Index Takes Another Hit


Reaches second-lowest point in 35 years

Here's hoping whatever stimulus package eventually gets passed includes a price break on Prozac, because it seems small business owners are in need of the stuff.  The National Federation of Independent Business's Index of Small Business Optimism fell again in January.

The index has been around for 35 years, and it's currently set so that the 1986 readout is equal to 100.  By comparison, January of 2009 registered at 84.1, a full 1.1 points down from December and actually the second-lowest reading in the survey's history.

William Dunkelberg, the NFIB's chief economist, also stated, "The failure of the index to rebound from historic low readings as it did in 1980 indicates that the recession will encompass the first quarter, with little chance for a bottom before the second quarter."

And, yeah, the Dow's down about 380 points for the day.

We'll try to highlight a handful of positives, though.  Compared to December, a few more small business owners now plan to increase capital outlays.  There were slight bumps in the categories of "expect economy to improve," "current inventory satisfaction," and "expected credit conditions," too.

One more thing: if the next small business optimism report tells of a new record low, at least that'll represent an achievement of a perverse sort.

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About the author:
Doug Caverly is a staff writer for SmallBusinessNewz.

Comments

Optimism Index Low? I Think Not.

Thanks for the story it got me fired up in a good way....I am not sure how they measure this index. Is does seem a little unclear. What I do know is my optimism index is determined by how many other small business people I see showing up every day to give it their best shot. The poll takers do not own a business or work 100+ hours a week because they believe in themselves. Oh yea they do not have a dream either...you know the kind of dream that keeps you going no matter what. Every entrepreneur knows the business they start might not make it. That is a fact of business good economy or bad. The only true failure is to have not started a business in the first place. Based on that we are all winners and our optimism index is clearly off the charts. Congratulations to us all.

Could Not Agree More

I could not agree more with Lee's comment and will add, to every adversity there exist an equal or better opportunity.  Look back at the Great Depression, economic upswing followed with opportunities abounding.  Let's start looking for the opportunities and stop beating on how bad things have been! 

Lee you are 100%

Lee you are 100% correct.

 

Thanks,

Peter Roesler
President of a Florida Web Design company

I'm optimistic but...

I'm optimistic but very glad I'm just a web site owner. The over head for a brick and mortar store can be a drain in times like this and depending on what kind of business it is, can be a liability or asset. My safety and security products seem to do very well in an economic down turn. Thanks, Doug, for this helpful information.

Great article

Great article Doug. This is the classic case of who moved my cheese where the people that are in trouble did not adapt to the changing world and the needs of their customers

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