National Federation of Independent Business Survey
April 13, 2023
The following chart shows how financing is getting acutely strained for small firms. The National Federation of Independent Business puts out the following survey. It essentially asks whether it is getting easier or more difficult to get financing. As you can see, since the failure of SVB and Signature Bank, it is becoming significantly harder for small businesses to finance themselves. Why is this important? 54% of Americans are employed by businesses with less than 500 employees. My guess is small business will respond to this difficulty by cutting expenses and the largest one they have is people. Layoffs are only starting to warm up. We saw it today when jobless claims once again jumped above expectation. At 239k claims, we are still under the 270k that economists traditionally use as a recessionary signal, but we have moved up from less than 200k per week to 239k in a month’s time. If I were the Fed, I would find that trajectory a little chilling.