Small Business Owners Less Positive In July

The National Federation of Independent Business (NFIB) reported that small business owners became more downbeat in July as expectations of weaker economic growth in the second half of the year reinforced a reluctance to hire. NFIB said its optimism index fell 0.9 point to 88.1 in July.

“Virtually all of the decline was due to weaker expectations for business conditions six months from now,” said William Dunkleberg, the group’s chief economist.

Only 2% of respondents said they had plans to create new jobs. That actually represented an improvement from June’s 1% reading. Data recently released showed the U.S. labor market is still in a rut, with a net loss of 131,000 jobs for July.

The NFIB report found that inflation pressures remain tame. Just 12% of small business owners reported raising average selling prices, while 24% said they were cutting prices. The report said that, with no pricing power and real sales volume weak, profits are not able to recover, reiterating that inflation is clearly not a problem.