NFIB: US Aug Small-Business Optimism Index Drops To 88.1
September 13 2011 - 7:59AM
Dow Jones News
Small-business owner confidence fell to its lowest level in just
over a year, according to data released Tuesday.
The National Federation of Independent Business's small-business
optimism index fell to 88.1 in August, down from 89.9 in July. The
drop was the sixth consecutive decline and put the index at its
lowest reading since a similar 88.1 posted in July 2010.
"The expansion is officially two years and two months old, but
the small business half of the economy is still in the 'tank'," the
report said.
Expectations for real sales growth and business conditions were
the major drivers of the decline.
The subindex of expected business conditions in the next six
months plunged 11 percentage points to -26%, and the expected
higher real sales index plummeted 10 points to -12%.
The earnings trend subindex slipped 2 points to -26% in
August.
Despite the overall pessimism, the August employment subindex
rose 3 points to 5%. And the subindex covering hard-to-fill job
openings rose 3 points to 15%.
Even so, the jobs index is weak by historical measures, and
hiring has suffered over the summer. The report said business
owners reported reducing employment an average of 0.08 workers per
firm over the past few months, driven primarily by losses in
construction.
Pricing power eased sharply. The NFIB said that on a
seasonally-adjusted basis, the net percent raising selling prices
fell 6 points to 1% last month.
"The price surge that emerged on Main Street a few months ago
has dissipated, taking the pressure off of the inflation measures,"
the report said.
-By Kathleen Madigan, Dow Jones Newswires; 212-416-2466;
kathleen.madigan@dowjones.com
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