Small Business Optimism Stalled, Reflecting Economy: NFIB

A national index measuring small business optimism has stalled at its historically low level, reflecting the stagnation in the overall economic recovery.
Dropping just a tenth-of-a-point for May, the index from the Nation Federation of Independent Business (NFIB) is at 94.4.
The category of expected sales are in a three-month decline. Expectations for increasing future sales continued to be weak, far below readings recorded in any other recovery period since 1973, the NFIB said.
However, some employment components improved and profit trends remained relatively stable after a sharp gain in April.
“In the last year, small-business optimism has limped along, and today the sector is no better off than it was just over a year ago,” said NFIB Chief Economist William Dunkelberg. “The lack of progress is discouraging, producing no signs that economic activity will pick up this year at all.”
Levels of hiring and spending remained depressed in May, as did plans to do more in the near future.
Sixty percent of those surveyed said now is a bad time to expand their businesses; one in four of those owners cited political uncertainty as the main reason, second only to concerns about a weak economy.
There are positives. Prospective labor market indicators posted gains that built upon those reached in April.
Moreover, there was gradual improvement in reports of collecting and paying bills on time, and trade credit availability improved. Compensation continued to show some strength, and price hikes moderated.

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