Back on September 11, we penned a little something called “Give Small-Business Owners False Hope Again!”
In case it’s not clear enough from the sarcastic title, the overarching point was that small business owners had likely overdosed on Donald Trump’s trademark “covfefe” on the way to pushing the NFIB’s small-business optimism index to the highest level in its 45-year history.
For context, the August reading topped the long-standing record of 108, set in 1983 when the Gipper was running the show.
The proximate cause for the euphoria: Tax cuts and deregulation. “The small business engine continues to roar with the dramatic change in economic policies since November 2016”, the survey said, at the time.
Well, as it turns out, that was it. As we suggested, that was as good as it was going to get.
The latest read from NFIB shows that thanks (in part anyway) to Trump’s “greatest” shutdown, the index plunged 3.2 points in January (the largest monthly drop since 2015) to 101.2, the lowest since the last three weeks of November 2016 or, more to the point, the lowest since the immediate aftermath of the election.
In case you like your cliff-diving in table format, here’s an annotated visual from the actual report:
“Business operations are still very strong, but small business owners’ expectations about the future are shaky”, NFIB President Juanita Duggan said, adding that “one thing small businesses make clear to us is their dislike for uncertainty, and while they are continuing to create jobs and increase compensation at a frenetic pace, the political climate is affecting how they view the future.”
Right. The “future” is cloudy right now, as evidenced by the “good time to expand” index dropping by another 4 points in January, marking what looks to me like the largest two-month drop on record.
Although the NFIB did their best to put a positive spin on this, the bottom line is that gridlock in DC just catalyzed a grievous drop in one of the indicators that Trump sycophants have variously pointed to as evidence of all the “winning” he’s done sine taking office.
One more month like January and we will have (almost) wiped out the gains on the headline NFIB index seen after the election.
“Although January’s index showed some positive developments among current business conditions, the return to divided government in Washington created an inability to agree on basic policy measures”, NFIB Chief Economist Bill Dunkelberg noted. “This produced the longest partial government shutdown in history, elevating the level of uncertainty, which is damaging to economic activity.”
Thanks for that, Bill.
Now if only there were a way to figure out who was responsible for the shutdown….