U.S. Small Business Optimism Highest Since Early 2008
5th December 2014
Small-business owners in the U.S. are more optimistic now than at any time since early 2008, according to the latest Wells Fargo/Gallup Small Business Index. The overall Index score rose to 58 in November, up from 49 in July. The Index was last this high in the first quarter of 2008 when it was at 83. Despite these significant gains, the overall Index is still well below pre-recession levels.
These latest results are from the fourth quarter Wells Fargo/Gallup Small Business Index survey of small-business owners nationwide, conducted Nov. 10-14. The all-time high for the index over its 13-year history is 114, reached in late 2006, while the Index was at its all-time low of -28 in the third quarter of 2010. This increase shows that small-business owners are reacting positively to the same rising economic tides that have lifted overall economic confidence in the U.S. and optimism about jobs.
Small-business owners continue to be somewhat more positive about the future than the present, although both components of the index have risen steadily over the past two years. Owners’ future expectations are now at 37, while the present situation rating is at 21. Both of these are, like the basic index, higher than at any point since the first quarter of 2008.
Prospects for Increased Jobs at Small Businesses Improve
Small businesses are responsible for employing the vast majority of all workers in the country, with the Small Business and Entrepreneurship Council estimating that 90% of workers are employed at firms with 20 or fewer employees. Thus, it is an encouraging sign for the job market and U.S. economy overall that small-business owners’ expectations about hiring over the next year are at their highest point since 2007.
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