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COVID-19

Survey finds small business confidence at 8-month low

Justin Ho Feb 9, 2021
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If business owners can hang on, they may benefit from pent-up demand as consumers anticipate spending more in the year ahead. Spencer Platt/Getty Images
COVID-19

Survey finds small business confidence at 8-month low

Justin Ho Feb 9, 2021
Heard on:
If business owners can hang on, they may benefit from pent-up demand as consumers anticipate spending more in the year ahead. Spencer Platt/Getty Images
HTML EMBED:
COPY

Small business confidence has hit an eight-month low. The reading for January is out Tuesday morning from the National Federation of Independent Business. The number expecting better business conditions through the middle of the year hit its lowest level since 2013.

It’s hard to be optimistic about business over the next few months, said Randy George, owner of the Red Hen Baking Company in Vermont. Its cafe hasn’t had indoor dining since last April.

“We do have a lot of people coming to the window and getting sandwiches to go, but, it’s a window,” George said.

Small business pessimism can be a drag on the overall economy, said Bill Dunkelberg, chief economist at the NFIB.

He said that when businesses expect sales to fall, “that’s going to feed back into their capital spending plans, and their inventory investment plans, and their hiring plans.”

But there are reasons for optimism, too. George said he expects sales to pick up in the second half of the year with more vaccinations and fewer restrictions.

“There’s this pent-up demand,” he said. “And when that starts to get released, you know, our challenge might be keeping up with that.”

A survey this week from the New York Federal Reserve found that consumers anticipate their spending will grow in the year ahead at the highest rate in five years.

COVID-19 Economy FAQs

So what’s up with “Zoom fatigue”?

It’s a real thing. The science backs it up — there’s new research from Stanford University. So why is it that the technology can be so draining? Jeremy Bailenson with Stanford’s Virtual Human Interaction Lab puts it this way: “It’s like being in an elevator where everyone in the elevator stopped and looked right at us for the entire elevator ride at close-up.” Bailenson said turning off self-view and shrinking down the video window can make interactions feel more natural and less emotionally taxing.

How are Americans spending their money these days?

Economists are predicting that pent-up demand for certain goods and services is going to burst out all over as more people get vaccinated. A lot of people had to drastically change their spending in the pandemic because they lost jobs or had their hours cut. But at the same time, most consumers “are still feeling secure or optimistic about their finances,” according to Candace Corlett, president of WSL Strategic Retail, which regularly surveys shoppers. A lot of people enjoy browsing in stores, especially after months of forced online shopping. And another area expecting a post-pandemic boost: travel.

What happened to all of the hazard pay essential workers were getting at the beginning of the pandemic?

Almost a year ago, when the pandemic began, essential workers were hailed as heroes. Back then, many companies gave hazard pay, an extra $2 or so per hour, for coming in to work. That quietly went away for most of them last summer. Without federal action, it’s mostly been up to local governments to create programs and mandates. They’ve helped compensate front-line workers, but they haven’t been perfect. “The solutions are small. They’re piecemeal,” said Molly Kinder at the Brookings Institution’s Metropolitan Policy Program. “You’re seeing these innovative pop-ups because we have failed overall to do something systematically.”

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