SMBs Reign In Spending, Hiring

Coming off a strong 2018, small business owners are becoming more conservative in terms of how many investments they make and how many new people they will hire.

According to a report in The Wall Street Journal, some of the business owners are responding to signs that sales are slowing, while others are reacting to fears over tariffs with China, volatility in the stock market and the impact from the government shutdown that lasted more than a month and was the longest shutdown of the government in modern history.

According to The Wall Street Journal, in January economic confidence among small businesses reached the lowest level since President Donald Trump took office. The survey, conducted for the paper by Vistage Worldwide, found 14 percent of small businesses expect to see an improvement in the economy this year — compared to 36 percent who are bracing for it to get worse. What’s more, The Wall Street Journal found that small business owners were more pessimistic than a year ago, marking the first time since Trump won the election in 2016. “We could be at a turning point,” said Richard Curtin, a University of Michigan economist who analyzed the data in the report. “Recessions are not made of one firm collapsing, but of many firms cutting back in marginal ways.”

In addition to rising concerns among small businesses about their financials and the economy, 42 percent of the business owners who were surveyed said the Trump Administration has improved business for them. In January of 2018, that percentage was at 52 percent. Of survey respondents, 34 percent said the president had no impact on their business. Close to one in four small business owners said the Trump Administration has negatively impacted the outlook for their operations.

Despite the negative assessment on the part of the small businesses surveyed by the WSJ, the Labor Department announced late last week that nonfarm payrolls increased by 304,000 last month. That implies hiring continues at its red-hot pace.


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