Another month, and yet another painfully slow increase in small business confidence, which remains at historically low levels.
The National Federation of Independent Business’s small business optimism index climbed 0.4 points in February to 94.3 after increasing by the smallest of margins (0.1 point) in January. While this marks the sixth consecutive month of improvement, the index remains at a considerably lower level than where it stood one year ago.
The report suggests that owners are becoming slightly more pessimistic about the outlook for business conditions but more optimistic about future sales growth, resulting in the modest change in the index.
“The good news for small-business owners and those watching the economy is that things are getting better,” NFIB Chief Economist Bill Dunkelberg said in a statement. “However, at this slow pace of growth and recovery, it could be years before we are again enjoying prosperity.”
Employment at small firms ticked higher during the month after remaining frozen in January, with small business owners increasing employment by an average of 0.11 worker per firm in February. However, sluggish sales remained a major problem for companies, with 22 percent calling it their top business problem.
The report comes on the heels of a mostly favorable employment report from the Labor Department, which showed that the economy added 227,000 jobs last month while the unemployment held steady at 8.3 percent. Even the latter statistics was shed in a positive light, as economists called it the result of more people starting to look for work in response to the growing economy.
However, steadily increasing gas prices and the upcoming election have created an overwhelming sense of uncertainty and, according to Dunkelberg, are surely weighing heavily on the minds of small business owners, which may keep the economic recovery trudging along at a glacial pace.