Small Business Bummer

by: Wall Street Strategies

By David Urani

January's NFIB small business optimism index was another disappointment, posting a reading of 88.9. Although that's up slightly from the 88.0 reported in December, it was still one of the lowest readings in the 40-year history of the survey. That was centered around a dismal -30 reading for expectations over the next six months.

This month's survey is particularly interesting given that the fiscal cliff debates late last year had crushed small business sentiment. As it turns out, the actual result of the fiscal cliff discussions did little to help optimism. And how can you blame them, as 2013 brings higher taxes (much of which comes from the higher income tax rates on the "rich," which also includes a multitude of small businesses) as well as increased healthcare costs and more regulations?

As it stands, more small business owners are reporting declining sales than growth, and only 11% have hired in the past few months. Taxes and government requirements remained the two biggest problems for small businesses with 21% of the tally each, followed by poor sales at 19%.

NFIB Chief economic Bill Dunkelberg unsurprisingly remains highly critical of the President saying, "owner pessimism is certainly not surprising in light of higher taxes, rising health insurance costs, increasing regulations, and just plain uncertainty. The president will address the state of our nation tonight, but he apparently won't have much that's positive to relay to our small-business community -- not while the pall of uncertainty over economic policy continues to depress investment spending and growth."