U.S. News

Small Business Optimism Fades: NFIB


Optimism at small U.S. businesses faded in June as owners saw little in the economy to encourage them, a survey released on Monday showed.

The National Federation of Independent Business's index of small business optimism fell 1.2 points in June to 96.0 as economic growth continues to weaken.

"GDP growth will continue, but it will be closer to two percent real growth than three percent," said William Dunkelberg, chief economist for the group.

The index has not delivered a recession signal, due in large part to the strength of the labor market components -- the percent of firms with unfilled job openings and the net percent of owners planning to expand employment, NFIB said.

"Although job creation has not displayed the strength it had earlier in the expansion, it has been surprisingly solid, even with a weakening of the housing market," said Dunkelberg.

Over the next three months, 20 percent of the owners polled planned to create new jobs, down five points from May, and 7 percent plan workforce reductions, up one point, said NFIB.

Fifty-four percent of the firms reported hiring or trying to hire new workers.

Job growth was flat compared to May, with about as many firms increasing total employment as reducing it, 12 percent each, NFIB said.

Twenty-six percent of the firms polled reported unfilled job openings, up two points from June, while 13 percent of the owners said the availability of qualified labor was their top business problem, a point higher than last month.

Reports of earnings gains faded by three points from May, still not as low as early in the year, but headed the wrong way, the group said.