U.S. Small Business Morale Falls Slightly in June

Tuesday, 12 Jul 2011 08:10 AM


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)

© 2015 Thomson/Reuters. All rights reserved.

Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
Zip Code:
Privacy: We never share your email.
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Hundreds Pack Idaho Hearing on Gay Rights

Monday, 26 Jan 2015 19:53 PM

A measure before the Idaho legislature that would grant job and housing protections for gay and transgender people drew  . . .

Thousands of Flights Canceled as Storm Descends on the East

Monday, 26 Jan 2015 19:14 PM

Airline travelers are going nowhere fast because of the blizzard bearing down on the Northeast. . . .

GOP Donors Appear in No Hurry to Commit to 2016 Candidate

Monday, 26 Jan 2015 18:50 PM

Add Chris Christie to the list of prospective candidates for president now taking donations, a group of Republicans that . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

America's News Page
©  Newsmax Media, Inc.
All Rights Reserved