Small Biz Optimism Rises, But Beware the "Economic Winter"

Small businesses are gaining at least some confidence.

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Optimism among small business owners continued to gain in December, a report from the National Federation of Independent Business released this morning shows.

But Bill Dunkelberg, chief economist for the small business lobbying group, remains cautious, if not downright pessimistic. He points out that we’ve seen this movie before throughout the prolonged, slow recovery from the Great Recession.

“Much of December’s gain resulted from the fact that concerns about business conditions over the next six months have subsided and because many small-business owners have improved their expectations for real sales gains in the coming months,” said Dunkelberg.

“But make no mistake: the economic winter is still here. Similar gains in the early part of 2011 quickly faded, and the Index is still well below where it should be at this point in the recovery. The economy appears to be slowly recovering, resolving imbalances in debt, housing and the like. But, it is unlikely that growth will be much better than 2011 even with a solid fourth quarter GDP growth. There is still a lot of work to be done.”

The monthly NFIB small business confidence index rose 1.8 percent for the second month in a row in December, settling at 93.7. In the past four months, the index has gained 5.7 points. But it’s still 6 points below the pre-recession average.