This Week's Economic Roundup
Despite renewed strengths in the labor market, small-business owners are growing increasingly concerned with uncertainties in the housing and financial markets. Here's a look at this week's economic developments and how they may impact your business.
Owner Optimism Down
Unsteady mortgage rates, among other concerns, had small-business owners feeling less optimistic about the economy over the first quarter, Wells Fargo reported on Thursday.
Based on a survey of 600 small employers nationwide, the Wells Fargo/Gallup small-business index dropped four points to 110 between January and March, following a record 114 at the end of 2006, the San Francisco-based lender said.
The quarterly index gauges six key components, including the financial situation, cash flow, revenues, capital allocation, hiring, and credit.
"The slight drop in small-business owner confidence was evident in both the present situation and future expectations components of the index, suggesting weaker current and future conditions than the last quarter of 2006," Scott Anderson, the chief economist at Wells Fargo, said in a statement.
Anderson blamed the downturn on the combined pressures of high gas prices, resetting mortgage rates, and moderating home prices.
Small-Business Salaries Up
Average annual salaries at the nation's small businesses hit $31,791 in March, an increase of 1.6 percent over the past year, SurePayroll reported on Tuesday.
The increase marked the 19th consecutive month of gains, the Chicago-based payroll firm said.
"That’s the highest average salary we've seen since we started tracking the small-business economy," SurePayroll President Michael Alter said in a statement. "These strong gains in personal income don't seem to be losing steam."
The results were based on payroll data from more than 18,000 small businesses nationwide.
Job Cuts Down
The number of job cuts at U.S. businesses fell by 41.7 percent in March to 48,997, outplacement firm Challenger, Gray & Christmas reported Wednesday.
The declines, which were down 24.6 percent from the same period last year, marked the 11the straight month of fewer job cuts compared to a year earlier, the report said.
The automotive industry led all others last month, announcing 23,481 job cuts in March, the report said.
"Despite some signs that the economy may be cycling down, the job market appears to be strong," John Challenger, the firm's CEO, said in a statement.
Factory Orders Ease
New factory orders rose by just 1 percent in February, revised down from a preliminary report issued last week, the Commerce Department said Wednesday.
New orders for durable goods, which were initially reported to have grown by 2.5 percent, grew by 1.7 percent, with sharper declines for primary metals, machinery, and electrical equipment, while orders for non-durable goods grew by 0.2 percent, the agency said.
Online Job Ads Down
There were 69,800 fewer jobs advertised online in March, bringing the total number of online jobs down to 3.75 million, the Conference Board reported Monday.
Despite the decline, online job ads were up by 18 percent from the previous year, the New York-based private research group said.
The biggest year-over-year gains in job ads were in Maine, Arkansas, North Dakota, and Missouri, the report said.
"All in all, the labor market is holding remarkably steady," Gad Levanon, a Conference Board economist, said in a statement, blaming last month's dip on a shorter reference period of mid-February to mid-March for the monthly report.
Jobless Claims Pick Up
Following sharp declines in March, new claims for unemployment benefits rose by 11,000 last week to 321,000, the Labor Department reported Thursday.
The advance seasonally adjusted insured unemployment rate was 1.9 percent for the week ending March 24, representing 2.492 million people filing unemployment claims, the report said.
The largest increases in new claims last week were in Michigan, California, and Oklahoma, while the largest decreases were in Mississippi, Ohio, and Pennsylvania, the report said.
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