Small Business Owners Foresee
Slow "Jobless" Recovery

The September survey of small business conducted by the National Federation of Independent Business (NFIB) found that owner optimism was pretty much unchanged from the previous month. Small business owners don't expect a double-dip recession, but also aren't expecting robust growth. As NFIB chief economist William Dunkelberg noted, "the economy has grown an average of 3% (real GDP growth) since the terrorist attacks of September 11, 2001, only ½ point below the 50-year average growth rate. Compared to 1996, stock market indices (NASDAQ excluded) are up 40%, the percent of the U.S. population with a job is .1 point higher, and interest rates and inflation are low. This is not a "bad" economy, just a boring one."

Job creation by small businesses actually declined slightly in September, the 16th negative number in 17 months. Output is rising, but firms are using excess labor capacity to get it produced, which means no new jobs. The most productive workers were retained through the recession, and they are still underutilized as sales growth remains modest. Hiring plans for the coming months fell by 7 points.