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Data released today showed that the NFIB Small Business Optimism Index pulled back in September to 101.8. According to analysts at Wells Fargo, the reading remains consistent with solid economic growth, but they see rising uncertainty as holding back hiring and investment.

Key Quotes:  

“The NFIB small business survey remains at a historically high level, and continues to point towards solid but slowing economic growth. The index fell in September to 101.8 from 103.1, consistent with consensus expectations of a small decline. The NFIB reported that “mumblings about a coming recession” are becoming more prevalent, but the index still sits within the top 20% of all readings in the 46-year history of the survey. Sentiment is clearly moderating though, down from a high of 108.8 in August 2018.”

“The decline in September was broad-based, led by falling hiring plans and deteriorating assessments of growth prospects. Small business owners continue to see strong demand, but feel less confident about hiring and expanding in the current environment. Tariffs are having a tangible impact on small firms””30% reported a negative impact in September.”

“Fed’s decision to cut interest rates appears to have had limited impact on small businesses.”

“The October survey could see an even bigger jump in uncertainty if the administration becomes further embroiled in the impeachment inquiry, which was launched on September 24. Small businesses owners are disproportionately Republican, and confidence skyrocketed following the 2016 election. GOP support for President Trump remains high, but political gridlock is worsening as we move closer to the primaries and 2020 election.”