The 2020 Mid-Year Economic Update_long

NFIB Small Business Optimism Falls in January

Job growth continues to be positive.

After reaching its highest level since October 2006 in December, the NFIB Small Business Optimism Index fell 2.5 points to 97.9 in January.

The current index indicates that the small business sector is functioning in a “normal” zone.

The biggest factor impacting the January reading was the subindex of expectations for business conditions over the next six months, which dropped 12 percentage points to 0 percent. Expectations for real sales declined 4 points to 16 percent and the earnings trends subindex was down 4 points to -19 percent.

NFIB attributed the decline in optimism to a realization by small business owners that Republican gains in the mid-term elections did not signal a wave of small business-friendly policies from the Obama Administration.

Meanwhile, job growth continues to be positive. NFIB reported last week that in the three month period which ended in January, small businesses added an average of 0.16 employees per firm, following a December reading of 0.20. NFIB noted that both the December and January readings are “historically very high numbers.”

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