While headline events such as the upcoming presidential race and China's slowing economy might not have an immediate impact on Main Street's profitability or economic prospects, such macro trends are important to smaller employers as they're creating a tangible overhang among business owners who feel "somewhat positive" about the future, according to new data.
Sentiment among small business owners has stabilized in the past two months, after a steady decline from the March high, according to San Francisco-based Thumbtack, an online platform for local businesses. The October reading was 63.75 on a 100-point scale.
The results — which captures the economic sentiment of more than 15,000 small businesses nationwide — mirror data from the National Federation of Independent Business's Small Business Optimism Index, which continues to hover under the 42-year average of 98 points.
More entrepreneurs began worrying about macro themes and its potential influence on the overall business climate, said Jon Lieber, Thumbtack's chief economist. Worries cited by business owners in a free form question format included China's currency crisis in August, the potential for rising interest rates and the future political climate as the 2016 presidential race nears. "There's a general decline in expectations about the future," he said.
The data from Thumbtack, produced in collaboration with Bloomberg economists, resemble other data sets that show contraction and dampened sentiment among small businesses — key job creators nationwide.
Small business growth slowed for a third-straight month in October, outsourcing solutions firm Paychex IHS reported Tuesday.
And according to an NFIB survey released in mid-October (in addition to its monthly sentiment index reading), nearly 70 percent of small-business owners believe the overall U.S. business climate is fair or poor. Six years out of the Great Recession, 63 percent of those polled said the country is on the wrong track. The NFIB surveyed 500 business owners with up to 250 employees.
No matter which study you pick, Main Street's list of worries include perennial hurdles to growth: Access to credit, wages and employment costs, and complying with government regulations.
Entrepreneurs also cite health-care costs and wages. During the third Republican presidential debate, hosted last week by CNBC, candidates Carly Fiorina and Ted Cruz, in particular, called out stalled wages and the expanding gap between the nation's highest and lowest earners.
Data in fact shows low-wage U.S. occupations seeing the largest real-wage declines since the recession — with lower-earners' pay falling more quickly than workers in higher-paid jobs, according to analysis from the National Employment Law Project.
The battle over wages will only intensify as the election nears. Wage advocates are pushing for a higher federal minimum wage above the current hourly rate of $7.25.