Just as I hit publish on the previous piece showing Gallup records a surge in unemployment, underemployment and part time workers wanting full time work, when I open an email to see the new Gallup Headline for today's release "U.S. Small-Business Owners' Hiring Intentions Plunge."
In the Gallup release it states that "U.S. small-business owners expect to add fewer net new jobs over the next 12 months than at any time since the depths of the 2008-2009 recession, according to this November's Wells Fargo/Gallup Small Business Index survey. Small-business owners' net hiring intentions for the next 12 months plunged to -4 in November, down from +10 in July and matching the previous record low recorded by the Wells Fargo/Small Business Index of -4 in November 2008."
Implications
The quarterly Wells Fargo/Gallup Small Business Index survey conducted in November shows small-business owners are pessimistic about their operating environment as 2012 comes to a close. As a result, owners' intentions are to reduce capital spending over the months ahead, consistent with a slowing economy. Further, one in five owners also expects to reduce the number of jobs at their company over the next 12 months.
That net hiring expectations at the nation's small businesses have declined to levels last seen in late 2008 is reason for concern. Such low net hiring expectations were followed by massive layoffs in early 2009. While a repeat of that experience seems unlikely in 2013, there is the potential for a serious decline in jobs early next year if small-business owners' hiring intentions do not improve.
Whether the pessimism of the nation's small-business owners is due to the fiscal cliff, Superstorm Sandy, the election, or some combination of these factors, the U.S. economy remains weak and unemployment remains high from a historical perspective. A further sharp increase in small-business layoffs, resulting in higher unemployment on top of the current economic conditions, could turn today's slow growing U.S. economy into something worse.
While the mainstream media is focused on the fiscal cliff negotiations, what they are not bothering to report is whether we go off the cliff or not, businesses, employers, the very foundation of a healthy economy, are telling us things are about to get very very bad.
Layoff Mania pieces here.
Obama Economy pieces here.
