Cited: MSNBC

Small businesses are often said to be the heart of the economy. For one thing, most of the hiring nationwide comes from these firms and these days, with unemployment hovering at 8.5% and arguably the biggest issue in the upcoming 2012 Presidential election, its easy to understand that any good news coming from this sector of the economy is bound to have a big ripple effect.

In the month of December, it was reported today, small business owners nationwide had a higher level of confidence in business conditions at their shops and for their expectations going forward. As was reported by the National Federation of Independent Business, confidence at small American businesses grew by 1.8 points to 93.8. The survey by the NFIB takes into account 10 different components and in the month of December 2011, eight of the 10 were either higher or unchanged. And of considerable note by the NFIB survey, most of the rosy outlook came in the area of expectations looking six months into the future.

Before anyone gets too carried away by the positive data, economists are quick to point out that the overall index is still mired in recessionary territory, so it will take additional information and positive sentiment on the part of small business owners before there is real room to believe that the worst is behind. The index now sits six points below the pre-recession average and more than ten points below the same point in the recovery from the 2001 recession. So while the index is still not above water, it is at a level where a few months of positive news will go a long way toward bringing this widely watched report into the black.

My take:

This is very good news because small business owners don’t pull any punches and they aren’t about to say that things are getting better if they aren’t. I’d expect that along with other positive data, they will be willing to increase their staff and really provide the boost that everyone expects from this market segment.

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