For the past two years I have been in the "Long-L" camp for our economic outlook. Actually, I am part of the REALLY Long-L sub-group, as I believe we are in for years of high unemployment and little real growth.
History shows that small businesses lead us out of recessions, and we see no strong sign that they are ready to help us grow out of our current economic doldrums.
Two new reports out this morning seem to reinforce this view.
The latest Intuit Small Business Employment Index out this morning shows some modest growth in small business jobs, with 25,000 new jobs created in May. However, until we see sustained small business job growth in the hundreds of thousands of new jobs created over a period of several consecutive months there is little to get excited about. And the Intuit numbers are actually mixed, as compensation grew only slightly and hours worked actually dropped.
This morning also brought news of a downward revision of GDP growth for the first quarter of 2010. We already knew growth had decelerated from the end of 2009 -- not good news at all. But, today's revision show that the deceleration was more than first reported.
High unemployment, tight credit, weak sales and anemic profits are the new norm, possibly for at least the rest of the decade. Sure hope I am wrong, but I see no signs that our economic policy will be changing anytime soon, which means little hope that conditions will improve for our small businesses.
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History shows that small businesses lead us out of recessions, and we see no strong sign that they are ready to help us grow out of our current economic doldrums.
Two new reports out this morning seem to reinforce this view.
The latest Intuit Small Business Employment Index out this morning shows some modest growth in small business jobs, with 25,000 new jobs created in May. However, until we see sustained small business job growth in the hundreds of thousands of new jobs created over a period of several consecutive months there is little to get excited about. And the Intuit numbers are actually mixed, as compensation grew only slightly and hours worked actually dropped.
This morning also brought news of a downward revision of GDP growth for the first quarter of 2010. We already knew growth had decelerated from the end of 2009 -- not good news at all. But, today's revision show that the deceleration was more than first reported.
High unemployment, tight credit, weak sales and anemic profits are the new norm, possibly for at least the rest of the decade. Sure hope I am wrong, but I see no signs that our economic policy will be changing anytime soon, which means little hope that conditions will improve for our small businesses.
Thanks for writing on this. You bring up some great points, as usual. However, I thought I would play devil's advocate and mention these two research samples which suggest that small businesses may be better poised to lead us out of the recession than they appear to be based on the research you mentioned:
http://bit.ly/cjQoWZ -- 45% of community banks, which primarily serve small businesses, have increased their business lending. The trend has moved in the other direction for the largest banks that finance much larger businesses.
http://bit.ly/aZkhml -- More than twice as many employees at large firms versus small firms say their workloads have increased "a lot" (suggests small firms are dealing with less employee stress, and therefore their people are more energized and are more physically present, as absenteeism rises with stress level).
Not trying to say your point is wrong, but merely including the above to spark greater discussion on this by your readers, as I think how small biz is doing is vitally important to predicting economic growth -- the "L" shape as you mentioned. Thanks.