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Small Business Optimism Remains as 2019 Comes to a Close
In two separate studies, Paychex’s Small Business Employment Watch and US Chamber of Commerce and MetLife’s Small Business Index, small business growth and optimism continue to grow and remain steady, largely impart to the tight labor market.
From the Paychex study:
“The tight labor market continues to positively impact wage growth. Hourly earnings grew 3.11 percent among employees of small businesses, the highest level since reporting began in 2011. Weekly earnings continue to grow, accelerating 3.75 percent in November.”
The increase in wages is directly tied to the tight labor market, which is forcing employers (large and small) to respond with a steady increase in hourly earnings, which have no reached the highest levels in nearly a decade.
From the MetLife/US Chamber of Commerce study:
“The MetLife & U.S. Chamber of Commerce Small Business Index reached 71.3 this quarter, up 0.6 points from 70.7 last quarter. This is the highest score since the survey’s inception in 2017 and marks the second consecutive quarter that the Index has set a new record.”
Small business owners remain optimistic as to their business healthy and the strength of their local economy.
Additional key findings include:
- 69% percent of small businesses report good health. This is the first time this measure has grown over four consecutive quarters (66% in Q3 2019, 65% in Q2, and 64% in Q1).
- An unprecedented 59% say their local economic outlook is good. This is the most optimistic businesses have felt toward their local economy since the survey’s inception (56% last quarter and in Q4 2018).
- 57% say the U.S. economy is in good health, similar to last quarter and continuing an overall positive trend since Q1 (was 58% in Q3, 59% in Q2, and 53% in Q1).
Small business sentiment remains a key indicator for economic growth and confidence, while the ongoing trade war with China has slowed the overall economic growth, small business continue to be a shining bright star of the economy.