The numbers: Optimism among small-business owners rose in September to the highest level during the pandemic, a new survey showed, but they are still uncertain about the future and some are barely remaining afloat.
The closely followed optimism index compiled by the National Federation of Independent Business rose 3.8 points last month to 104 — a level it last reached in January. The NFIB is the nation’s largest small-business trade group.
The increase in optimism adds to array of evidence showing the economy was still expanding at a steady if somewhat slower pace in September even as a huge small-business relief program was being wound down.
What happened: Although the main NFIB index has climbed back to precrisis levels, small businesses aren’t doing as well as they were earlier in the year. Sales and profits are down and not all customers have returned in an era of social distancing.
Many small businesses expect sales and profits to improve in the next six months, but there’s still plenty of doubt. The NFIB’s uncertainty index climbed again to 92, well above a reading of 75 recorded at the height of the pandemic.
The end of the so-called Paycheck Protection Plan meant to as a lifeline for small businesses and their workers is one reason for the uncertainty. Others worry about the persistence of the coronavirus, ongoing government restrictions on business operations and the prospect of customers staying away.
A separate study by the NFIB, for instance, found that 20% of small businesses are likely to lay off workers in the next six months. And 44% would apply for more government aid if it were offered to help them get through the crisis.
Read: The U.S. economy is still rising from the rubble, but anxiety is growing about another setback
The big picture: Small businesses are always more vulnerable in a recession because they have fewer resources to draw upon. More are likely to fail the longer the pandemic goes on, especially those in the hotel and restaurant business.
Yet the rising level of optimism also shows that a broader economic recovery carried on through September as companies both big and small founds way to to get back to business and customers slowly began to return.
Market reaction: The Dow Jones industrial average
and S&P 500
were set to open XXXX in Tuesday trades.