America’s small business community has changed its outlook since mid-summer and now predicts a major recession on the horizon, according to a recent survey of over 60,000 small businesses by RedBalloon and PublicSq. This spike in pessimism highlights the growing disconnect with the glowing optimism of federal policymakers and the reports from the economy’s ground-zero.
“Small businesses are the backbone of the economy, and they’re hunkering down for a difficult recession,” said Andrew Crapuchettes, CEO of RedBalloon. “While the fed and others speak glowingly about receding inflation and growing GDP, those businesses that actually have to navigate this economy are sending a much more cautious message.”
85% of respondents in the recent survey said they now predict a difficult recession. That’s up 25% from the month prior.
Meanwhile, the Federal Reserve Bank of Atlanta's GDP Now tracker recently reported impressive Gross Domestic Product (GDP) growth, projecting annualized real GDP growth at over 5% in the third quarter. And the Bureau of Labor Statistics recent Job Openings and Labor Turnover Survey (JOLTS) report showed an unexpected jump in job openings.
“These things don’t add up,” continued Crapuchettes. “Our monthly survey of small businesses has been spot-on in predicting future economic trends, and if I were a policy-maker, I’d pay close attention to what small businesses are saying is happening outside of the Beltway.”
Additionally, 75% of these small businesses say that the Fed's interest rate policy as the primary culprit behind their economic woes. As a result, they're scaling back on hiring and growth.
In other words, these small business owners aren’t buying the government reports.
If there is to be any hope of pulling out of this economic nose-dive, the Fed needs to hand over the controls to the Freedom Economy so these small businesses can use their hard work and experience to usher in a soft landing for the US economy during the holiday season.
Read the full results of the Freedom Economy Index here.
Methodology: The survey is constructed upon feedback from over 60,000 small businesses surveyed from September 25 to 29, with 1,126 respondents, maintains a 3% margin of error at a 95% confidence level.