NEW YORK (AP) — The fears of a slowing economy that sent stocks falling the past few months may be spreading to small business owners who have been quite optimistic in recent years.
The problem for businesses is consumer spending that, while strong now, is showing signs of slippage. Economists predict consumer spending will begin slowing later in the year, in part because taxpayers won’t be getting the surge in take-home pay many got in 2018 after the new tax law took effect. Many small businesses like retailers, restaurants and service providers rely on consumers for their revenue, making them vulnerable to a drop in spending.
The monthly survey that the advocacy group National Federation of Independent Business takes of its members showed a small dip in optimism during November and December, with expectations of lower sales in the coming months a key factor in the decline.
Owners who are mindful of the devastating impact the Great Recession had on small businesses are likely to be sensitive to signs of a slowdown.
Although owners had a burst of hiring in December, according to the payroll company ADP, they added on average about 20,000 fewer jobs each month in 2018 than they did in 2017. Monthly hiring numbers fluctuated widely last year, according to ADP’s analysis of its customers’ payroll data.