From nature brings hope

Watercolor by Carole Katz

Cautious Hiring

The percentage of small-business owners feeling optimistic about the economy fell from 67 percent in a June survey, to 47 percent in July, according to the online payroll service SurePayroll.

The caution among small businesses in many ways reflects what is happening in the broader economy and labor market. Conditions have dramatically improved since the worst of the recession, when companies were laying off workers by the hundreds of thousands. That’s not happening anymore, but neither is the next step needed to drive the recovery forward: robust hiring.

Keith Hall, commissioner of the Bureau of Labor Statistics, the federal agency that tracks the job market, said US employers need to create about 130,000 jobs a month just to keep up with population growth and hold the unemployment rate steady. In July 2011, the nation added just 117,000 jobs, after adding about 50,000 in each of the previous two months.

http://www.boston.com/business/articles/2011/08/15/in_survival_mode_small_businesses_cant_lead_on_jobs/

Cautious Hiring

The stock market turmoil, while unsettling, has validated the conservative approach to building a business. Small businesses have remained in survival mode, and plan to stay there. That could make an already slow economic comeback even more sluggish, economists say.

Small companies account for more than 50 percent of all private sector employment, and have traditionally led economic rebounds by adding jobs. That’s not happening this time. Owners have become accustomed to doing more with less and are getting by with fewer employees.

And there is nothing in the economic projections that is likely to change that thinking, said Chris G. Christopher Jr., a senior economist with the Lexington forecasting firm IHS Global Insight. Small-business owners’ confidence has been spiraling downward for months - even before the dramatic market swings of late.

Snorkeling in Oahu



A Slowdown for Small Business

Each month, the National Federation of Independent Business surveys the owners of small businesses about how they are doing and where they think the economy is going. One question asks whether businesses plan to increase or decrease the number of employees in the next three months.

Stagnant wages, coupled with the recent stock market slide and further declines in housing prices, have left consumers feeling not well-off enough to significantly increase their spending, which would encourage hiring.

When asked about the “single most important problem” facing their business, about one in four cited “poor sales,” according to the federation’s survey. Uncertainty over regulations is also mentioned frequently. About a third of businesses blame either “taxes” or “government requirements” for their current troubles, leading some economists to attribute the recent slide in overall business optimism to Washington’s protracted debates over tax policy, financial changes and health care.

Meanwhile, larger businesses, sitting on mountains of cash, have been weathering the weak recovery relatively well.

http://www.nytimes.com/2011/06/15/business/15jobs.html

A slowdown for Small Business

More small businesses say that they are planning to shrink their payrolls than expand them according to a report released by the National Federation of Independent Business, a trade group that regularly surveys its membership of small businesses across America.

Their finding provides a glimpse into the pessimism of the nation’s small firms as they put together their budgets for the coming season, and depicts a gloomier outlook than other recent economic indicators because this one is forward-looking.

While big companies are buoyed by record profits, many small businesses, which employ half of the country’s private sector workers, are still struggling to break even. And if the nation’s small companies plan to further delay hiring, there is little hope that the nation’s 14 million idle workers will find gainful employment soon.

What It All Means

For the 18 months of the Great Recession, labor markets deteriorated. At the end of 2009, they stopped dropping, and they’ve been stagnant ever since. Hiring is now 25% below where it was when the recession began. What 14 million Americans looking for jobs need is hiring improvement.

It is important to be clear about the actual root cause of today’s economic problems which began with the depth and severity of the Great Recession in December 2007. The bursting of the housing bubble wiped out $8 trillion of wealth, which hasn’t come back with falling home prices continuing today. Hundreds of billions of dollars of household spending has been lost, drying up the demand for goods and services that fuel employment.

Economists worry that budget cuts needed to close the deficit in the short term will take effect too soon. In the next couple of years, we need more fiscal support, not less. We need measures that will add more stimuli to the economy.

http://www.dailyfinance.com/2011/07/06/hard-facts-america-economic-recovery/

So if the results of the American Dream Survey are more about material wealth than freedom and liberty what can this mean for the future?