The Small Business Bellwether: The Economy is Going South
You really have to wonder what Congress was thinking as they debated and finally agreed the debt ceiling legislation.
Because, if any of their thinking had anything to do with a positive effect on the overall economy, they got it really, really wrong.
In fact, the results are already bad. Key economic indicators including consumer spending, manufacturing, job cuts and gross domestic product have already shown a downward trend and the expectation is that unemployment will remain at 9.2% when announced at the end of this week.
Add to that the continuing concerns in the stock market, and you've got an economy that's ready to fall off the cliff and into a double-dip recession.
It gets worse.
One of the best bellwethers of how the economy is doing is small business hiring and payroll. After all, according to the Small Business Administration, small businesses in the US:
- represent 99.7% of all employer firms
- employ half of all private sector employees
- pay 44% of total US private payroll, and
- generated 65% of net new jobs over the past 17 years.
Yet, according to the SurePayroll Small Business Scorecard, July "marked the tenth consecutive month of flat or shrinking hiring numbers across the nation." What that's left us with is a year-to-date hiring decrease of 2.4% along with a 0.3% year-to-date decrease in pay for those who still have jobs.
No matter which way you cut it, this is very bad news. Bad enough that Michael Alter, the President of SurePayroll asserts that the "economy is in reverse" and that the debt ceiling turmoil played a role in that outcome.
And when, according to the Scorecard, the results also show that there is a 20% decrease in optimism of small business owners, you've got an economy that is, at best, stuck and, at worst, going south.
The fact is, Congress and the President should all be ashamed. The past two elections were, ostensibly, about fixing the economy and creating job growth.
Clearly, these guys lost the plot. Unfortunately, it's the rest of us that are paying the price.