Small businesses are the “places where most new jobs begin,” President Obama said in his weekly radio address Saturday, a day after announcing new measures to create jobs.

Obama has proposed tax incentives and credits, expanded government loan programs and aid to community banks that he said will help small businesses hire new employees, reported Bloomberg News.

The president’s plan would eliminate capital gains taxes on small businesses in 2010 and give small businesses a $5,000 tax credit for every new job created. In addition, $30 billion from repaid bank bailout money would be distributed to community banks to spur small business lending, said the Associated Press.

The plan would also temporarily increase the cap on Small Business Administration loans from $350,000 to $1 million and expand the SBA program to help refinance commercial real-estate loans, said the AP. All of the proposals would need to be approved by Congress.

The unemployment rate has finally dipped just below 10 percent, but with the public deeply frustrated by sluggish job growth, the administration is refocusing its efforts on job creation.
“Government can’t create these businesses, but it can give entrepreneurs the support they need to open their doors, expand, or hire more workers,” Obama said in the radio address.

With the collapse of secure corporate jobs, more people are pursuing an entrepreneurial path, says Entrepreneur.com.

The Kauffman Index of Entrepreneurial Activity, which measures new startups, shows a slight rise in the creation of small businesses even since the recession began, and that is expected to continue through 2009, according to Entrepreneur.com. About 1 million people a year become self-employed, and enrollment in entrepreneurship programs at universities is up.

But how does this square with the hits small businesses have taken in the past two years?

Many experts say that the recession is actually the perfect time to begin planning a small business startup. Office space and supplies are cheaper; with larger companies closing or downsizing, there are service gaps in many areas; and with the high unemployment rate there are plenty of talented people looking for work and ready to hustle.

While entrepreneurs may not see an immediate payoff, smaller, more flexible and creative companies are the business model of the future. And new technology will be the key to creating this new entrepreneurial society.

“Suddenly, you don’t have to have a large physical plant to start a company,” Michael S. Malone, author of “The Future Arrived Yesterday: The Rise of the Protean Corporation and What It Means for You,” told Entrepreneur.com. “The cost of entry is getting close to zero — now the little guys can build a business without the overhead. The best strategy is to get small and adaptable, strip things to a solid core and hire from the cloud of talent out there — then blow up like a puffer fish when you encounter a potential market.”

A drop in the November unemployment rate provided a glimmer of hope that the unrelentingly bleak job market may be headed for a turnaround.

The unemployment rate unexpectedly fell to 10 percent last month, from 10.2 percent in October, as employers cut the fewest number of jobs since the recession began. The average work week and earnings also rose in November, the Labor Department reported.

The economy shed 11,000 jobs last month, an improvement from October’s revised total of 111,000 lost jobs, and significantly better than the 130,000 Wall Street economists had expected in November, said the Associated Press.

Economists say that substantial job growth is needed to make a dent in the unemployment rate. According to the Labor Department, 15.4 million unemployed people are seeking work, and 11.5 million others are working part-time but want full-time jobs or have given up job hunting altogether.

In a troubling sign for small businesses, a survey by the National Federation of Independent Business showed more small companies plan to reduce employment in the next three months than plan to add jobs, said the AP.

The U.S. unemployment rate hit 10.2 percent in October — a 26-year high, according to recent figures from the Labor Department.

The country shed 190,000 jobs in September, even as other economic indicators have pointed to a recovery from the recession. President Barack Obama on Friday signed a bill that would extend unemployment benefits up to an additional 20 weeks and extend the first-time homebuyer tax credit.

Republican critics of the Obama administration are pointing to the double-digit unemployment rate as proof that the $787 billion stimulus package is failing; meanwhile, labor unions and some Democrats are calling for more spending to create jobs, according to the New York Times.

The highest level of unemployment came at the end of 1982, when it hit 10.8 percent, reported the Times.

The housing market and manufacturing output are showing signs of stabilization or improvement in many parts of the country, but consumer spending and hiring isn’t budging, according to reports by the Labor Department and Federal Reserve released Wednesday.

“You are in that period where the recession is over but you don’t have job growth. And until we get job growth, nobody is going to believe the recession is over,” John Canally, an economist for LPL Financial in Boston, said in a Wall Street Journal article.

The unemployment rate tops 10 percent in 14 states, according to the Labor Department.

While the business climate is getting better, the report also noted that the commercial real estate market is still weak. Regional banks haven’t freed up business lending, so many empty storefronts remain vacant.

Cities with federal projects funded by the federal stimulus bill, such as Cleveland, Chicago, Minneapolis and Dallas, are the only areas reporting an increase in commercial real estate activity, according to the Wall Street Journal.

Disappointing June job numbers in the Unites States and Europe led to a slump in world stock markets and a creeping pessimism about the short-term economic outlook.

The U.S. unemployment rate for June hit a 26-year high of 9.5 percent. Since the recession began in December 2007, the U.S. has shed nearly 6.5 million non-farm jobs and the unemployment rate has doubled, said Reuters.

Unemployment in Euro-zone countries also hit 9.5 percent in June, with 3.4 million jobs lost since May 2008. Retail sales in countries that use the Euro dropped 0.4 percent in May, said the Associated Press, an indication consumers still fear job losses.

The first week of March provided little to be happy about for investors with terrible job news and a still-volatile Wall Street hitting a low not seen since 1997.

“Stocks rose, fell, then clawed their way back to a mixed close after the Labor Department released its February jobs report,” MSNBC.com said in a March 6 story. “But while the market finished well above its lows — the Dow Jones industrials had a modest gain after falling more than 120 points — many market watchers say there’s no reason stocks can’t slide further, even as the major indexes are near 12-year lows.”

Contributing to that downward pressure is that big institutional investors are still sitting on the sidelines, MSNBC.com said, leaving the market to the far more volatile actions of short sellers, who buy stock on borrowed cash and bet for the price to go down.

“The shorts are having a complete field day in this environment,” Kent Engelke, managing director at Capital Securities Management in Glen Allen, Va., told the Web site. “Right now you have everybody so fearful, and these shorts are controlling the market.”

The worst news of the week came with February jobs numbers — worse than analysts expected, but not as bad as some investors had feared, MSNBC.com said.

“Employers cut 651,000 jobs last month, and the unemployment rate jumped to 8.1 percent, MSNBC.com said. The government also revised its December and January job loss figures up to 681,000 and 655,000, respectively.”

The Dow was down 6.2 percent for the week, marking its lowest point since the spring of 1997.

There have been gains in the market, but the overall slide has been too far and too fast for a small rally to make a difference.

“When you get this precipitous of a fall, you are always due for some sort of rally, but a rally will be unsustainable,” Jeff Buetow, senior portfolio manager at Portfolio Management Consultants told MSNBC.com.