Small Business Confidence Falls

Expectedly.

It would not appear that we should expect any hiring in the foreseeable future, unless that future includes a new president.

Small-business owner confidence fell a bit further in July, dragged down by worries about earnings, according to data released Tuesday.

The National Federation of Independent Business’s small-business optimism index dropped 0.2 point to 91.2 last month following a steep 3-point drop in June.

The report in general was downbeat about business conditions among small businesses. The view isn’t surprising given the other weak data reported in economic sectors from manufacturing to retailing. 

“The Index has averaged 90 in this recovery, now 3 years old and is the worst recovery period from a recession,” since 1973 when the data began, said the report.

The top-line index was dragged down by concerns about earnings. The net earnings trend subindex fell another 5 percentage points to -27% after it had declined 7 points to -22% in June.

The June new-jobs subindex rose 2 points to 5%. The NFIB said the net change in employment per firm over the past three months remained negative but improved to -0.4 in July, from -0.11 in June.
The subindex of owners reporting hard-to-fill job openings held steady at 15% after falling 5 points in June.

Small business owners don’t expect business activity to improve much in the next six months. The subindex of expected business conditions rose 2 points to -8% last month, but the expected higher real sales subindex declined fell 1 point to -4%.