The stock market is up over fifty percent since the low of the year (in March).  According the government statistics the economy improved third quarter and GDP was up to 3.5% fueled by consumer spending and the housing market.  With all of this good news concerning the recovery why isn't the small business owner seeing these changes?

If we ignore the Wizard of Oz for a moment and "Pay no attention to the man behind the curtain" and look a little deeper we may find some answers.  The stock market, more specifically, the S&P 500 is made up of 500 of the largest companies in the US.  These large companies do a large percent of their business overseas.  Most of the recent increased profits are from these overseas markets.  This overseas market is not just the sale of  goods but also the manufacturing of goods.  So while the stockholders are enjoying the increase of the stock price, it is not doing any thing for the US economy since jobs and spending is being increased in India or China not in the US.

The housing market and consumer spending has recently increased.  But has it really, or is the government really doing the spending?  The housing market recent increase can be attributed to the $8,000 tax credit given to first time home buyers and consumer spending increase is directly related to the cash-for-clunkers program.  So in reality the government is subsidizing and in a way manipulating some of the recovery news that we have been hearing.

For the small business owner, revenues are not necessarily increasing they just aren't decreasing.  Although I am not jumping on the recovery band wagon, business stabilization is the first step to a better economic environment.  Small business still need to endure another twelve months of stagnation before reality can catch up with the headlines.