The National
Federation of Independent Business (NFIB) reported on Tuesday its Small
Business Optimism Index fell by 2.5 points to 91.2 in July, following a 2.2-point climb in the previous month. This was the first drop in the indicator in five
months.
Economists had forecast
the index to slip to 93.6 in August.
According
to the report, the August decline in the headline gauge was due to decreases in
8 components, led by a measure of small business owners expecting real sales to
be higher (-9 points), a measure of small business owners reporting positive
profit trends (-7 points), and a measure of small business owners expecting the
improvement in the economy (-6 points). These declines, however, were partly
offset by increases in such two indicators, as a measure of small business
owners reporting they have job openings that they could not fill in the current
period (+2 points) and a measure of small business owners planning capital
outlays in the next few months (+1 point).
Commenting on
the latest data, Bill Dunkelberg, NFIB Chief Economist, said that, the mood on
Main Street worsened in August, despite last month’s gains. “Historically high
inflation remains the top issue for owners as sales expectations plummet and
cost pressures increase,” he added. “Uncertainty among small business owners
continues to rise as expectations for future business conditions worsen.”