Gloom Surrounds Small Biz Optimism Uptick

Small business owners were a little more optimistic in September than August, according to a poll by the largest small business lobbying organization.

But the uptick in National Federation of Independent Business monthly survey for September wasn’t exactly a leap. And more businesses are planning to cut back in coming months.

William Dunkelberg, chief economist for the organization, laid the blame for lackluster numbers squarely on Congress’ shoulders, pointing out in his commentary:

Members of Congress fled with no action on important issues like expiring tax rates, leaving the cloud of uncertainty larger and darker. In response, consumer sentiment fell and owner optimism remained anchored solidly in recession territory. Thus, spending stayed in “maintenance mode,” deterioration of jobs continues, and capital spending remains at historically low rates. Owners won’t make spending commitments when sales prospects remain weak and important decisions such as tax rates and labor costs remain so uncertain.

Still, the small business optimism index ticked up slightly, rising .2 points to 89 in September. That places it firmly in recession territory, even though the recession officially ended in June 2009.

And, even more discouraging, 16 percent of small business owners surveyed by the organization plan to cut jobs in the next three months, up 3 percent from August.

That could make for a very grim holiday season in the sector that’s supposed to drive U.S. job growth.

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