Small-business owners feeling less optimistic in July: report
Main Street is a gloomy place these days, as political bickering and the recent U.S. debt-rating downgrade suck the confidence out of small businesses, according to a new report.
The monthly optimism index from the National Federation of Independent Business fell for the fifth straight month, slipping 0.9 points in July, to 89.9.
"Expectations for growth are low, and uncertainty is great," said Bill Dunkelberg, chief economist for the group. "And considering the confidence-draining performance of policymakers, there is little hope that Washington will stop hemorrhaging money and put spending back on a sustainable course."
Slow growth will continue for the rest of the year, the report suggests, exacerbated by high unemployment and inflation rates. There are more small-business owners say they believe that the economy will deteriorate in six months than those who predict an improvement, the report found.
About a quarter said poor sales were mostly to blame, the report said, but a heavy contingent also pointed to taxes, government regulations and red tape -– even more so than inflation, insurance and competition from larger companies.
In July, 14% of owners cut jobs, compared with the 12% who added positions, the report said. Eleven percent they plan to trim their workforce down the line.
Sales are down for 28% of owners, while profits fell for 38%, the report said.
-- Tiffany Hsu
Photo: The closed Hott Spot Grill, along with several other businesses that remain on Main Street in downtown Hugo, Colo. Credit: Ed Andrieski / Associated Press