WASHINGTON (Reuters) - Confidence among U.S.
business owners slipped last month amid expectations of weak
sales and a deterioration in business conditions over the next
six months, a survey showed on Tuesday.
The National Federation of Independent Business' optimism
index dipped 0.1 point to 90.8 last month from May.
Continued pessimism among small business owners could add
to fears that the economy might take longer to dig out of the
soft patch it has been trapped in since the beginning of the
year.
The economy stumbled in the first half, buffeted by high
commodity prices and supply chain disruptions after the March
earthquake in Japan.
Hopes that growth would regain momentum by the third
quarter were dampened somewhat by data on Friday showing that
employment stalled in June, with nonfarm payrolls rising a mere
18,000 after gaining just 25,000 in May.
"There is not much to be optimistic about as a small
business owner," the NFIB said in a statement.
The NFIB survey's gauge of business conditions over the
next six months dropped 6 points in June, while its measure of
sales fell 3 points. The survey covered 766 small businesses
and was conducted through June 30.
With sales anticipated to be weak, fewer businesses plan to
raise average prices in the next few months than in in May.
That supports the Federal Reserve's contention that the
recent spike in inflation would be temporary.
Still, the weak sales outlook bodes poorly for investment
in inventories. Businesses generally did not plan to order more
stock, according to the survey.
"Large manufacturers and wholesalers will begin to notice a
weakness in orders and inventories building," the NFIB said.
Government data last week showed inventories at wholesalers
starting to pile up in May as sales dropped. A similar pattern
is expected with business inventories for May, scheduled for
release on Thursday.
But there are some glimmers of hope on the horizon. While
small businesses laid off workers in June, there was an
increase in the proportion of owners planning to create new
jobs over the next three months.
There was also a rise in the number of businesses saying
they could not find workers to fill current positions.
(Reporting by Lucia Mutikani; Editing by Leslie Adler)
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