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This Week’s Economic Roundup
Small-business owners less confident in economy; gas prices continue to rise.
By: Angus Loten
As gas prices rise and concerns about the economy grow, small-business owners are cutting back on expansion and job creation plans. Here’s a look at this week’s economic developments and how they may affect your business.Owner Confidence Down
A weaker outlook on the economy had fewer small-business owners planning to expand in March, the National Federation of Independent Business reported Monday.Based on a national survey of its 600,000 members, the group’s small-business optimism index fell 0.9 points last month to 97.3, below its benchmark level of 100. About a quarter of the group’s members typically respond to the monthly surveys.Six out of 10 components of the index were down in March, including plans to increase employment, current inventory satisfaction, and the outlook on the economy.Fewer owners than in the previous survey said they expect the economy to improve, while more were anticipating weaker sales, the survey found.Despite the downturn, the number of current job openings edged up.
“Overall, the outlook didn’t change much in March — no soaring economy, but not recession,” William Dunkelberg, the group’s chief economist, said in a statement.
CEOs More Optimistic
By contrast, the nation’s chief executives were more optimistic about the economy over the first quarter, the Conference Board reported Monday.In a survey of 100 business leaders nationwide, 24 percent said current business conditions were better or the same as the last quarter, while 37 percent said conditions in their specific markets improved, up from 23 percent in December, the New York-based private research group said.
The group’s quarterly CEO confidence index rose three points to 53, after hitting 50 in the closing months of 2006. “Business leaders do not expect conditions to worsen. But by the same token, they do not expect conditions to improve,” Lynn Franco, the group’s director of consumer research, said in a statement.
Meanwhile, employees were less confident in the job market, according to a separate report by Spherion on Monday. Out of 3,000 employees surveyed nationwide, just 17 percent said they felt the economy was gaining strength, down from 24 percent in February, the Fort Lauderdale, Fla.-based recruiting firm said.
While 63 percent said they were confident in the future of their current employer, only 24 percent said they believed more jobs were available, the survey found.
“While the economy still looks relatively healthy, recent concerns about continued growth, coupled with rising energy prices and stock market volatility has certainly affected workers’ viewpoint on the economy,” Spherion CEO Roy Krause said in a statement.
Gas Prices, Demand Rising
Gas prices climbed by 9.5 cents last week to 280.2 cents a gallon, the tenth consecutive week of increases, the Energy Information Administration reported Wednesday.Despite higher prices, demand has grown to an average 9.363 million barrels per day over the four weeks ending April 6, 2.5 percent above the same period last year and a record high for the month, the report said.
Jobless Claims Up
New claims for unemployment benefits surged by 19,000 to 342,000 last week, the sharpest gains in eight weeks, the Labor Department reported Thursday.The gains were largely due to seasonal adjustment problems associated with the Easter holiday weekend, analysts said.
The largest increases in new claims were in Oregon, Missouri, and Alabama, while the largest decreases were in Michigan, New York, and California, the report said.
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Corra has heard talk that small business owners are somewhat less sanguine about the economy. Or at least they are concerned in ways the economy pertains to them. Since small business is still a large driving force in this country, there is an impact when its owners take a wait and see attitude.
But if you are the one hiring right now, that may not necessarily be a bad thing. Their job freezes gives you a wider, deeper pool of potential job candidates. Someone’s hesitation is someone else’s opportunity.
Needless to say, or the facts being what they are it does need to be repeated. When hiring, have a preemployment screening program in place. Check out every candidate. Run a criminal background check, and a Social Security Trace, along with an Education verification check. If they drive for you in any way, then be sure to run an Motor Vehicle Records (MVR) Report.
It’s important. You will find out if they are who they say they are. You will be wise and save money in the long run. As Corra says, check them out before you hire.
