Small-business optimism “sighed” in July, according to the National Federation of Independent Business. The NFIB’s monthly index increased just more than half-a-point (0.6) for a total reading of 94.1.
The NFIB said this month’s report continues the historically weak trend of owner confidence that has led some observers to suggest that index should be renamed the “Small Business Pessimism Index.”
On the positive front, the NFIB noted, while the two labor market indicators remained weak, both improved and are beginning to push into “normal” territory. But uncertainty about the future remains endemic among jobs creators, only 9% of respondents think that now is a good time to expand their businesses.
“In an attempt to ‘make lemonade’ from the lousy bushel of lemons the administration has handed the small-business community, owners gave the July optimism index the great distinction of being the fourth highest reading since December 2007 when the economy slipped into official recession. But let’s not get too excited: The level is still well below the average reading of 100 in the prior 35 years and still half a point below the December 2007 reading.” said NFIB chief economist Bill Dunkelberg.
According to the NFIB, credit continues to be a non-issue for small employers, 5% of whom say that all their credit needs were not met in July, unchanged from June and May, and the lowest reading since February 2008. Thirty percent of owners surveyed reported all credit needs met, and 52% explicitly said they did not want a loan (65% including those who did not answer the question, presumably uninterested in borrowing).
The NFIB said in July, the frequency of reported capital outlays over the past six months fell 2 points to 54%, 7 points below the average spending rate through 2007. The percent of owners planning capital outlays in the next three to six months was, again, unchanged at 23%. Reports of outlays fell almost across the board, painting a weaker spending picture than the month prior.
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