Small Businesses Remain Gloomy, Raising Doubts About Job Growth

I suggested last week that the latest employment report was not as hopeful a sign for the economy as Wall Street was taking it for.

Economists were impressed with surveys appearing to show strong growth in hiring by smaller companies. I wondered whether that just indicated that frustrated jobseekers were resorting to Plan B and starting their own businesses.

A survey released Tuesday by the National Federation of Independent Business, a group representing small enterprises, showed a decline in small-business optimism last month to 88.0 from 89.3 in January. Analysts who follow this obscure measure had expected an increase to 90.0.

This seems to confirm my misgivings. If smaller firms were really expanding, as the employment survey was being interpreted, wouldn't they express more optimism in the sentiment survey?

Small-business sentiment has remained subdued for months. As the announcement of the NFIB survey results said, "The persistence of index readings below 90 is unprecedented in survey history."