Small Business Confidence - Up or Down?

I'll warn you in advance that this post is not so much a commentary on whether or not small business confidence is up or down as it is on the fact that headlines don't give you the whole story, and that you can't rely on the news to give you the information you really need to make decisions in your business.

I use Google Alerts to keep me up-to-date on the latest news related to entrepreneurs and small business. Yesterday, a funny thing happened -- I ended up with the following two stories right next to each other in my daily alert:

Small-Business Owners' Confidence Falls in June

Los Angeles Times - CA,USA

A quarterly US survey of small-business owners shows that confidence and optimism have fallen, matching a low in 2004, in part because of worries over record ...

Small Business Optimism Up

Inc.com - New York,NY,USA

... Federal Reserve raised interest rates by a quarter-point for the tenth straight time Tuesday, lending credence to reports that the small business climate is ...

My immediate reaction was, "Well, which is it?"

Upon digging further, I found that the LA Times story is based on a June survey from Wells Fargo/Gallup, and that the Inc. story is based on a July survey from the National Federation for Independent Businesses. So two headlines on the same day end up giving a very different message. This is why you have to dig a little deeper into the news in order to get any really useful information.

I think what really disturbed me most was reading in the Inc. article about the relationship between an increase in Federal Reserve interest rates and small business optimism:

Despite the possibility that the Fed's action could discourage consumer spending, University of Rochester economist Mark Zupan said that the announcement was a good sign for small businesses.

"The Fed is inferring that the economy is stronger than expected," Zupan said. "If you are a small business owner this is a signal that you should be bullish."

So let me get this straight... regardless of what's really going on in their immediate experience (increased oil prices, increased labor costs, housing market slowdown, slowed consumer spending, etc.), small business owners are supposed to view an increase in interest rates as a sign that the economy is getting better, and therefore should go out and spend more money? Wow. The logic behind that is just baffling to me.

The Gallup economist, on the other hand, said:

"Small-business owners are less optimistic about interest rates, which as shown today continue to rise. There is concern the economy may not be as strong as a lot of people are assuming."

If the experts can't even agree on what this means, how do they expect any of the rest of us to actually derive anything actionable out of this information?!?

All the more reason to "go with what you know". How is your business doing? What's going on in your neighborhood? In your target market? If you don't know, talk to people directly and find out. The national news isn't going to give you the information you really need to run your business.