Small Business Confidence Up Slightly In February

Confidence improved slightly among small-business owners in February, but entrepreneurs still aren't feeling a lot of optimism, nor are they hiring. This is the finding of a monthly survey by the National Federation of Independent Business. The group reported recently that its small-business optimism index edged up 1.9 points to 90.8 points from 88.9 points in January. In January, Small-business owners' confidence was virtually flat, as entrepreneurs failed to recoup losses sparked by December's "fiscal cliff" scare.

"While the Fortune 500 are enjoying record high earnings, Main Street earnings remain depressed," said NFIB chief economist Bill Dunkelberg in a prepared statement. "Far more firms report sales down quarter over quarter than up."

"Until owners' forecast for the economy improves substantially, there will be little boost to hiring and spending from the small business half of the economy," Dunkelberg said.

The slight increase in optimism follows a buoyant mood on Wall Street as the Dow Jones industrial average reached new all-time highs. A strong employment report helped as well. The economy created a net 236,000 new jobs and the unemployment rate fell to 7.7 percent. But small business for the most part isn't celebrating just yet.

The reason for this is that there's a concern that the budget cuts related to the sequester are likely to have an impact on small business. Companies with U.S. government contracts must decide which workers will likely be laid off as funds to keep them on payroll evaporate. Nervous about fallout from Washington, many small- to mid-sized employers remain cautious on spending and hiring.

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