Small business owners were slightly more optimistic, as the National Federation of Independent Business (NFIB) Small Business Optimism Index climbed 0.5-point to 88 in December, despite labor market components dropping and a pessimistic view of conditions in the next half year, according to the report, published Tuesday.
"Congress played chicken right up to the end of the year, leaving small-business owners with no new information about the economy's future-no sense of how much their taxes would increase or if the economy would go over the now infamous 'cliff,'" said NFIB chief economist Bill Dunkelberg. "The eleventh hour 'deal' has brought marginal certainty about tax rates and extenders and will provide some relief to owners, but it certainly doesn't guarantee a more positive forecast for the economy. The January survey results will be far more enlightening about how the sector views the deal-higher taxes and minimal spending cuts may not be a panacea. And let's not forget what is looming on the horizon: a debate over the debt limit and a regulatory avalanche of historic proportions about to spill out into the country. Happy New Year."
NFIB said the index remains "at a recession level reading as pessimism prevails."