Small business owners in America are starting to have an unpleasant outlook on the economy, evidenced by the fact that a gathering number of small business owners are planning on reducing jobs over the course of the next three months according to a survey from an industry group.
According to the National Federation of Independent Businesses, the percentage of businesses that are planning on increasing employment over the next three months has dropped to 13% in May. This is a 3% drop from the 16% in April and a 5% drop from the 18% in March.
In addition to that, the percentage of small businesses planning on decreasing work forces has increased to 8% in May from 6% in April according to the group. The group also stated that, on a seasonally adjusted basis, the small businesses foresee a small net decline in employment.
The survey’s index of small business optimism decreased by a total of 0.3 points in May to 90.9. This was the third consecutive month that a decline has been reported. But, what is causing this month after month? Well, the main cause appears to be weak sales. Nearly 23% of small business owners have reported that sales were higher in the past three months with 36% saying that the sales were lower.
According to NFIB Chief Economist Bill Dunkelberg, “Corporate profits may be at a record high, but businesses on Main Street are still scraping by. The failure to understand why small business owners are not hiring or investing has resulted in a set of policies that have not been very effective, and Main Street is suffering.”
Back on June 6 the United States Labor Department reported that the unemployment rate increased a little bit back in May to 9.1%, compared to 9% in April. The economy did manage to gain 54,000 jobs in May. However, that pales in comparison to the gain of 232,000 the month before showing that job growth is slowing.
Source: CNN Money – Grim outlook for small business jobs
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