Small-business owners turned more optimistic about an economic rebound in May and shifted to the view that a coronavirus-induced recession will be “short-lived,” a closely followed survey shows.
The numbers: The optimism of small companies in the U.S. economy rose 3.5 points last month to 94.4, the National Federation of Independent Business said Tuesday. The increase was twice as large as Wall Street had forecast.
“As states begin to reopen, small businesses continue to navigate the economic landscape rocked by COVID-19 and new government policies,” said NFIB’s chief economist Bill Dunkelberg. “It’s still uncertain when consumers will feel comfortable returning to small businesses and begin spending again, but owners are taking the necessary precautions to reopen safely.”
Business owners who plan to rehire workers said they were encouraged to do so by the federal government’s Paycheck Protection Program, a huge rescue plan designed to save small businesses and their employees. Washington is offering forgivable loans to firms that keep employees on payrolls regardless of whether they are working.
The NFIB index has a solid record historically in signaling peaks and valleys in the economy. The survey sank to as low as 90.9 in April, but it is still well off a 104.5 reading right before the pandemic started.Big picture: The strong rebound in employment in May likely was helped by the small-business rescue plan. Companies have been given money to keep paying workers until the immediate crisis recedes.
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