The numbers: Small business owners have been more optimistic about conditions getting better soon, despite promises of faster economic recovery in the U.S. offered by coronavirus vaccines.
The hope index closely followed by the National Federation of Independent Businesses fell 0.9 in January to 95.0, hitting its lowest level since the outbreak began the pandemic last spring.
More alarmingly, the percentage of small business owners who expect the situation to improve in the next six months has fallen to a seven-year low. Pessimism has skyrocketed in the last four months, a period that coincides with a higher outbreak in coronavirus cases.
The NFIB is the largest small business lobbying group in the country.
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What happened: Many small-scale businesses have had to re-scale or limit hours after the recurrence of coronavirus cases, especially those that deal directly with customers such as restaurants, hair salons, studios yoga and so on. In some cases, companies have had to lay off employees for a second or third time.
The flareup has raised doubts about how long it will take for the economy to recover – and how many small businesses will survive. Even though the vaccines are very effective, it is far from clear when business will return to normal.
The big picture: Small businesses have fewer cases to survive in quiet times than large businesses. The pandemic has already killed thousands of small companies, with more likely to go extinct.
A gusher of new federal support will help in the coming months. So there will be warmer weather and a wider spread of coronavirus vaccines. But the uncertainty is never going away any time soon.
What are they saying? “The COVID-19 pandemic continues to determine how small businesses operate, and owners are concerned about the future location and sales of business,” said Bill Dunkelberg, chief economist at NFIB .
Market response: Dow Jones industrial average DJIA,
and S&P 500 SPX,
rose in trade Monday.