Small Business Confidence Falls Again

Small business confidence in the economy fell to its lowest levels in four months in July.  A survey showed the decline in confidence was caused mainly by the low expectations for economic growth.  The news is disheartening to many because the small business sector is where much of the nation’s job growth comes from.

In July, the National Federation of Independent Business’s index fell from 89 in June, to just 88.1 in July.  Of the ten components the index charts six declined from the previous month.  The report indicates that small businesses are planning to cut their investments, and are unsure if now is a good time to expand.

Economists are predicting that consumer and business spending will decline throughout the second half of the year.  This prediction has lead small businesses to believe the outlook six months from now may be poor.  In a measure of future optimism, the index gauges business owner’s six month expectations for better business, and the numbers do not look good.  The score fell to minus 15%, a nine point drop from the previous month.  The score, which fell fourteen points the previous month, is now the lowest it has been since March of 2009.

As the economic situation continues to fluctuate, the outlook of small business owners will do the same.  Earlier in the year it appeared as if owner confidence was beginning to rebound, however as the effects of the economic stimulus package continue to decline, owner confidence in consumer spending is following the same line.

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