The National
Federation of Independent Business (NFIB) reported on Tuesday its Small
Business Optimism Index fell by 0.3 point to 91.5 in July, following a 2.5-point fall in the previous month. This marked
the 33rd straight month the indicator stayed below the 50-year average of 98.0.
Economists had predicted
the index to rise to 91.7 in September.
According
to the report, the September gain in the headline gauge was due to increases in
five components, led by a measure of small business owners expecting real sales
to be higher (+9 points) and a measure of small business owners reporting
positive profit trends (+3 points). These advances, however, were partly offset
by declines in such three indicators, as a measure of small business owners
reporting they have job openings that they could not fill in the current period
(-6 points), a measure of small business owners planning capital outlays in the
next few months (-5 point) and a measure of small business owners planning to
increase inventories in the coming months (-2 points). Meanwhile, the remaining
two components were unchanged.
Commenting on
the latest data, Bill Dunkelberg, NFIB Chief Economist, noted that small business owners were feeling
more uncertain than ever. “Uncertainty makes owners hesitant to invest in
capital spending and inventory, especially as inflation and financing costs
continue to put pressure on their bottom lines,” he added. “Although some hope
lies ahead in the holiday sales season, many Main Street owners are left
questioning whether future business conditions will improve.”