The National Federation of Independent Business (NFIB) small business index, a monthly report on the economic health and outlook of the nation’s small, independently owned businesses, measured 91.2 for the month of July, slightly below its June reading of 91.4. Optimism fell for the third consecutive month, reaching its lowest level in nine months.
Respondents to the survey were pessimistic when it came to both sales and earnings; they did not expect either to rise in the near future. The small businesses were also negative in their overall economic outlook.
Not everything was doom and gloom, however. Respondents said they hoped to do more hiring and raise their selling prices. They also expected credit conditions to ease.
IHS Global Insight economist Chris Christopher said he has already noticed a drop in optimism among small business owners since the beginning of the summer. “The [NFIB] report is not good since small businesses are feeling the brunt of this sluggish economic recovery,” Christopher said. “The real downer in this report is that small businesses do not see much hope for positive earnings. The good news in this report is that more firms feel the need to hire, and the overall outlook did not fall by much. Looking ahead, small business optimism should still remain in a depressed state of affairs until there is considerably more stable consumer spending growth and renewed confidence that the government can provide solutions to Main Street.”