Small-Business Owners Still Downbeat About Future: NFIB
Small business owners became more downbeat in July as expectations of weaker economic growth in the second half of the year reinforced a reluctance to hire, according to a survey published on Tuesday.
The National Federation of Independent Business (NFIB) said its optimism index fell 0.9 point to 88.1 in July.
"We don't have any confidence that the economy is going to get fixed, that it's going to improve," William Dunkleberg, the group's chief economist, told CNBC. "We really crashed when it came to expectations for business conditions. Not good."
Dunkleberg said the main reason for the drop in sentiment was because of weaker expectations for business conditions in six months.
Only 2 percent of respondents said they had plans to create new jobs. That actually represented an improvement from June's 1 percent reading.
Data released last week showed the U.S. labor market is still in a rut, with a net loss of 131,000 jobs for July.
The NFIB report found that inflation pressures remain tame.
Just 12 percent of small business owners reported raising average selling prices, while 24 percent said they were cutting prices.
"With no pricing power and real sales volume weak, profits are not able to recover," the report said. "Inflation is clearly not a problem."
Respondents said they are fearful of the political climate in terms of taxation issues as well as increased costs for national health care and financial reform.
"The index is pretty much full of forward-looking components, and looking forward—not too good," Dunkleberg said.