For entrepreneurs and those fascinated by the small business world, the explosion of internet financial journalism can be both a blessing and a curse. Everyone has an opinion these days on the state of the business world, and everyone with an opinion has a blog and a Twitter feed. But every now and again, some wisdom is passed on that is so important, we must pass it on.
The Wall Street-Journal has provided 5 small business indicators that are essential for forecasting the direction of the US economy. They are listed below.
- Real Personal Consumption Expenditures: this will “shed light on whether consumers are spending and how much”
- Consumer Confidence
- Producer Price Index: important to monitor because it can reveal inflationary pressures
- U.S. Dollar
- Unemployment Rate
The big issue, underlying most of this is consumer confidence. There will be a day, either this year or the next, when people decide it is safe to go out and spend again. This will have something of a domino-effect on the economy at large. All of these indicators will give you a great sign of where consumer confidence lies.
If you are a franchisee considering taking on extra staff or considering expansion or a prospective franchisee trying to perfectly time your entry into the market, our advice is this: monitor these indicators very closely throughout the year.