Caution: If you can't handle more grim economic news, don't read this. WASHINGTON, DC -- A leading measure of small business optimism -- released this morning -- has plunged again, to the second-lowest level in its 35-year history. The National Federation of Independent Business (NFIB) Small Business Optimism Index has proven itself a reliable indicator of what mainstream biz owners are thinking. And what they're thinking right now would sound something like this: $^%!&**( ! #$#!$%&+)(!.
Business owners were hoping consumers would ride to the rescue as '08 ended. But, nooooooooooooo! Didn't happen. So now what? "Unless there's a solid turnaround in January, we're in for a longer than usual recession," says Bill Dunkelberg, NFIB's chief economist and a professor of economics at Temple University's School of Business, as well as that B-school's former dean. Biz owners are cutting everywhere, including capital spending, inventories and jobs. A blood curdling 53 percent of small businesses report falling profits. Overall, profit gains hit a record low.
"Dunk," as he's known in DC circles, knows his stuff. We worked together some 15 years ago publishing his commentary on this very same index of business sentiment in a national small business magazine I edited. NFIB's Small Business Economic Trends is a monthly survey of small business owners' plans and opinions. But what Dunk and others at NFIB (the nation's largest small biz association) are seeing now is jaw-dropping.
Price changes at U.S. small businesses are another tally that's entered uncharted territory. The number of business owners able to raise prices is in full out retreat, showing what NFIB describes as "an unprecedented decline in six months." You can see more details on the NFIB survey at their research foundation.