Small business confidence sputters, NFIB says

July 9, 2013 -  By

Small business optimism remained in tepid territory in June, as the National Federation of Independent Business’ (NFIB’s) monthly Small Business Optimism Index dropped just under a point (0.9) and landed at 93.5, effectively ending any hope of a revival in confidence among job creators. Six of the ten Index components fell, two rose and two were unchanged.

While job creation plans increased slightly in June, expectations for improved business conditions remained negative. The Index—which was 12 points higher in June than at its lowest reading during the Great Recession but 7 points below the pre-2008 average and 14 points below the peak for the expansion—has been teetering between modest increases and declines for months.

“After two months of incremental but solid gains, the Index gave up in June,” said NFIB Chief Economist Bill Dunkelberg. “This appears par for the course, given that there is no reason for small employers to be more optimistic and lots of things to worry about.

“Washington remains bogged down in scandals and confidence in government’s ability to deal with our fundamental problems remains low. Economic growth was revised down for the first quarter of the year and the outlook for the second quarter is not looking good. Nothing cheers up a small-business owner more than a customer, and they remain scarce and cautious while consumer spending remains weak and more owners are reporting negative sales trends than positive ones. It certainly doesn’t help that the endless stream of delays and capitulations of certain provisions of the health care law adds to the uncertainty felt by owners. Until growth returns to the small-business half of the economy, it will be hard to generate meaningful economic growth and job creation.”

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