The NFIB Index of Small Business Optimism gained a whoppin’ 0.6 points in July. At 94.1, the Index does not impress and signals nothing but a subpar performance for the 3rd quarter. In an attempt to “make lemonade”, the July reading is the 4th highest reading since December 2007 which was 94.6, well below the average reading of 100 in the prior 35 years and only half a point better than the July reading.

Gross Domestic Product (GDP) revisions confirmed what the NFIB survey has been reporting – we are not producing much additional output and not employing many new workers. Growth in the 4th quarter of 2012 was essentially (0.1%), growth in the 1st quarter of 2013 was revised down to 1.1 percent and the 2nd quarter at 1.7 percent (first guess). Only 160,000 new jobs (July) would be insufficient to lower the unemployment rate to 7.4 percent were it not for more people disappearing from the labor force. If you do not want a job, you can not be counted as “unemployed”. Broader measures of unemployment reveal a weak labor market. Much has been made over the high level of job creation in recent months. GDP numbers seem inconsistent, what are they making? July’s job growth is more consistent with the poor GDP numbers.

Meantime, the leadership vacuum continues with Congress unable to negotiate and the President on the campaign trail rarely talking about the big issues while tossing government tidbits to various voter blocks. Employment remains millions below its level in 2008 and only 11 percent of consumers think government policy is “good” (Reuters/University of Michigan, July survey). This is where we stand after four years of “recovery”.

The amazing stock market continues to surge ahead, even as prospects for earnings growth fade. On Main Street, there is no evidence of profit growth. The economy remains bifurcated, exports turned in a good performance, mostly activity for the large manufacturers, energy companies and agribusiness. Sales for small businesses, especially at service firms, continue to languish. Job openings improved, signaling a tightening in labor markets due as much to departures from the labor force as to the creation of new jobs (of which there were few). But this puts downward pressure on the unemployment rate. Plans to create new jobs also advanced, in spite of pessimistic views of future sales growth, but still historically low and not typical of periods of economic growth.