Summary of SBA, Office of Advocacy, Second Quarter, 2007: The Economy and Small Business (PDF)

Although the economy grew, small business owners and consumers have a more pessimistic outlook.

  • The economy grew an annualized value of 3.4% in the second quarter - most of the growth is in net exports and private investments of non-residential construction.
  • The NFIB optimism index fell to 96.0 in June and hiring plans for small businesses faded.  (The historical average for this index is 100.2. )
  • The economic and business mood seems to reflect higher energy costs and the housing slow down.
  • Unemployment rate is 4.5% which means businesses are still finding it hard to fill open positions.  Every industry except construction, manufacturing and retail trade gained jobs during this quarter.
  • Short term interest rates stayed relatively the same.
  • The current Senior Loan Officer Opinion Survey shows that the demand for small loans has weakened and banks are tightening their standards for small commercial and industrial loans.
  • The core annualized inflation rate (does not include food and energy) grew 2.3%.
  • The overall consumer price index grew by a annualized 5.2%.  A significant portion is due to higher energy and food costs.  The cost of West Texas crude oil was up nearly $7/barrel since March.