Ok, that is a loaded question. We can take a look at many things, and say, “yea, with all the bad news coming out, of course small business owners are losing confidence”. The NFIB confirms that with their latest report. Reasons cited? What else….inflation fears brought on by higher gas prices, and high unemployment.
But wait … aren’t gas prices going down? Oh, that’s right. They may be going down, but they are still up substantially from even six months ago. I recently heard Warren Buffett suggest that when construction activity turns positive, then the economy will get going. Well, not exactly what he said, but since we have made the connection between employment uncertainty and an improving economy, I guess I made the assumption that one follows the other.
Ok, I am not in a position to disagree with Mr. Buffett. But really? It seems to me or in my humble opinion (IMHO…learned this one from my kids) that the issue is bigger than that. Again, IMHO, that would say that the majority of those unemployed are tied to the construction industry somehow…but what about workers let go from financial services firms or those whose manufacturing jobs were offshored? I am not seeing how improvements in the housing picture get them back to work. Or the small business guy who can no longer compete with the big box retailer?
Anyway, far be it from me to disagree with Mr. Buffett, but I guess I’d like to ask him for a little clarification.