Optimism among small business owners fell by 0.9 points in July, falling to 88.1 following a sharp decline in June. That’s the finding of The National Federation of Independent Business (NFIB) Index. The Index has been below 93 every month since January 2008 (31 months), and below 90 for 24 of those months, all readings typical of a weak or recession-mired economy, according to the NFIB.
“The recovery in optimism that we are currently experiencing is very weak compared to recoveries after the 1982 and 1975 recessions,” said Bill Dunkelberg, NFIB’s chief economist. “The small business sector is not on a sustained positive trajectory, and with this half of the private sector missing in action, the economy’s poor growth performance is not surprising.”
Small business employment was still on the decline in July, ending with a negative 0.15 in July (seasonally adjusted). However, July was actually an improvement from recent months where average declines of workers per firm were negative 0.48 in May and negative 0.28 in June.
In July, 10 percent (seasonally adjusted) reported unfilled job openings, up one point from June but historically very weak. Over the next three months, 9 percent plan to increase employment (down one point from June), and 10 percent plan to reduce their workforce (up two points from June).
The percent of owners planning to make capital expenditures over the next few months fell one point to 18 percent, two points above the 35-year record low. Five percent characterized the current period as a good time to expand facilities, down one point from the number who reported that June was a good time to expand facilities.
“Owners do not trust the economic policies in place or proposed, and they are distressed by global and national developments that make the future more uncertain,” said Dunkelberg.