Optimism Climbs, But the Glass Is Only Half-Full

If you're a small-business owner still struggling to make ends meet, maybe it's time to relax. According to Leslie Levesque, senior economist at IHS Global Insight, the outlook seems a bit brighter for small-business owners.

Woo-hoo! Where is all this optimism coming from? Well, Levesque noted in an email that:

• The National Federation of Independent Business (NFIB) Small Business Optimism Index advanced 1.7 points to 92.9.
• Respondents' outlook on the economy improved the most, up six percentage points.
• Sales expectations (up five percentage points to 1 percent) in the next three months turned positive for the first time since May.
• Employment indicators improved markedly as those reporting intentions to hire reached its highest level since February 2008.

And she went on to explain that August represents a change over three previous months of flagging optimism. "The outlook on the economy and business prospects turned brighter, and more small business owners are now expecting higher sales in the next three months."

Still, even an optimist has to face facts. The improved responses were not enough to bring the index back to levels registered in the first half of the year. And, she noted, there is still plenty of continued uncertainty, starting with the outcome of the presidential election, and running through the end-of-year fiscal cliff -- the so-called "taxmageddon."

That uncertainty was also evident in a survey of Hispanic entrepreneurs released this week by Pittsburgh-based PNC Bank (NYSE: PNC). Although the survey found Hispanics are largely optimistic about growing their businesses during the next two years, it noted that "doubts about the economy and cutbacks in their spending may actually stall future expansion..."

Hunkering down in the face of a stubborn U.S. economy, with plans to conserve cash, reduce capital spending and manage expenses carefully, including some who will cut staff. The segment face concerns over several public policy issues, particularly taxes, the federal deficit, health care, climate/environment and immigration.

But in a US News and World Report post, Jonathan Clements, director of financial education at Citi Personal Wealth Management, says there are three positive signs for the economy. He notes:

1. Americans are sacrificing less. The Citi Economic Pulse found fewer consumers are reducing their credit spending (60 percent this year compared to 68 percent last year), fewer are working a job they "wouldn't take in a better economy" (24 versus 29 percent), and fewer are reducing their restaurant trips (58 versus 67 percent).
2. The majority of Americans report feeling more in control of their finances. In fact, Citi found 76 percent of respondents feel "a greater sense of control."
3. The majority of survey respondents said they believe their local economy will improve in the next year, an increase from 41 percent who said the same last year.

So what do you think? Do we need party hats, rose-colored glasses -- or a giant bucket of cold water to restore more realism?