Monday, August 1, 2011

Will debt deal ease uncertainty?

As politicians work to finalize a debt ceiling deal, many hope the compromise will wipe out some of the uncertainty still plaguing the U.S. economy.

It's unclear how much of a boost that will generate. But one recent report, at least, suggests the federal budget is a top concern for business owners. The latest Business Confidence Survey from HR and business services firm Insperity Inc., released today, found 74 percent of companies surveyed were either very concerned or had elevated concerns about the federal deficit and total national debt.

The report also found confidence slipping. Although businesses are growing this year, 40 percent are now delaying their expectations of an economic rebound to the first quarter of 2012 or later, the survey found. Just 12 percent reported a belief that the recovery is under way, down from 23 percent in Insperity's last quarterly survey.

In the survey of 5,700 small and medium-sized businesses businesses, conducted in mid-July, 32 percent reported adding new workers, down from 37 percent in the last poll. Sixty-two percent are maintaining current staffing levels, up from 57 percent last quarter, and 6 percent are laying off employees, flat from Insperity's last report.

Business owners' leading short term concern: The economy, followed by health care costs and operating costs. For the longer term, the federal deficit and national debt topped the list of worries, followed by the economy and potential tax increases.

What do you think: Will a federal debt compromise ease business owners' fears, or will other economic factors continue to dampen growth?

In other economic news:

  • Online job postings across the U.S. fell by 217,000 in July to about 4.15 million, according to a new report from The Conference Board. That follows a decline of 100,000 in June after a virtually flat period in April and May. There are about three job-seekers for every advertised opening, the report found.

  • Even children are feeling the pinch: A recent Visa Inc. survey found that the Tooth Fairy now leaves an average of $2.60 per tooth - down 13 percent from last year's payout, $3 per tooth. The eastern U.S. seems to have taken the biggest hit. Children there get about $2.10 per tooth these days, down from $3.40 in 2010.

  • 2 comments:

    Anonymous said...

    You ask:

    "Will a federal debt compromise ease business owners' fears"

    Of course not. You can't solve a problem of too much debt by adding more debt.

    Serious question: Do you have ANY understanding of economics?

    Anonymous said...

    The debt has always been there. The government spending is along the same spending lines as always. The problem is the revenue is not coming in. When Bush started tax cuts there was no talk about deficit and now deficit is you here about.

    When will somebody start talking about revenue, without it whatever is done will be failure. Also the debt ceiling would have been called for because of interest alone.. I also will definitely fill better when they get the new fanatics out of the white house. Nobody seems to understand the White House is ran by banks and the wealthy elite