US Small Business Optimism Faded in June, NFIB Survey Says
Washington, June 17 (Bloomberg) -- The optimism of U.S. small-business owners fell in June to its lowest in more than six years amid worries about profits, a survey by the National Federation of Independent Business showed today.
The group's Small Business Optimism Index was 97.9 in June, down 2.6 points from May. The most recent lower reading was 94.7 in October 1993.
Seven of the 10 index components declined, with the outlook for earnings showing the largest drop, the group said. Hiring plans and capital spending plans and the outlook for credit conditions also weakened.
``Is the economy slowing? Most definitely,'' said William Dunkelberg, the NFIB's chief economist. The federation, a small- business advocacy group, has 600,000 members. The findings are based on survey responses from 503 companies.
The survey also found 25 percent of companies raising their prices. The percentage of small businesses charging more exceeded the number cutting prices by 19 percentage points -- the largest gap in a decade.
That tracks with the 34 percent of small companies that reported hard-to-fill job openings and the 32 percent that said they raised wages to help attract and keep workers.
The Federal Reserve has raised the overnight bank lending rate six times since June 1999 in an effort to guard against accelerating inflation by cooling overall economic growth.
Manufacturing output and consumer spending, in turn, have shown signs of slowing in response to the central bank's actions. Industrial output, for example, rose 0.2 percent in June, the smallest increase in nine months, according to Fed statistics.
Jul/17/2000 5:00 ET |
