US small businesses aren’t doing as badly as they think they are

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Image: via @Pawelmorski

Unemployment in the United States is still high at 7.5%. Big corporations are continuing to hoard profits. The youth are doomed. Yes, yes; we know.

But the reality may be rosier than anyone thinks. Although small business owners remain terribly insecure, they appear to be saying one thing and doing another. On the one hand, “more owners plan to reduce employment in the coming months than plan to create new jobs,” says Bill Dunkelberg, chief economist for the National Federation of Independent Businesses.

But as this chart from Deutsche Bank’s Torsten Slok shows (via @Pawelmorski), small businesses have been adding about 200,000 jobs per month—just about the best rate of small business hiring since the financial crisis. Moreover, just about every new data point suggests that hiring in the US is stronger.

And as the chart shows, although measures of small business optimism tracked hiring pretty closely up until the financial crisis, since 2009 they seem to have diverged almost completely. Can we say “conundrum”?