Small business optimism up in January

Small business owners were slightly more optimistic about the economic environment in January than they were in December, according to a new survey by the National Federation of Independent Businesses.

The NFIB’s Small Business Optimism Index — based on responses from 2,033 randomly sampled small business owners in the NFIB’s membership in January — gained 0.9 points, reaching 88.9 in January.


(Julie Jacobson/AP)

Job creation was barely positive last month — 11 percent of surveyed owners reported adding employees over the past few months, and nine percent (up from four percent in December) reported reducing employment. Eighty percent made no net change in employment.

Despite these improvements, January’s rating of 88.9 is the fourth lowest reading in the survey’s 40-year history, which NFIB chief economist Bill Dunkelberg attributed to the “dismal news that our economy actually contracted in the fourth quarter of 2012”.

“While corporate profits are at record levels as a share of GDP, small businesses are still struggling to turn a profit,” he said in a statement.

The NFIB often criticizes President Obama’s small business policy, with many of its financial contributions supporting Republicans and opposing Democrats, according to research on OpenSecrets.org from the Center for Responsive Politics.

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Mohana Ravindranath covers IT and small business for the Washington Post and its weekly Capital Business publication.
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