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Small-Business Optimism in U.S. Was Little Changed in August

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Sept. 10 (Bloomberg) -- Confidence among U.S. small businesses stagnated in August as weaker sales damped earnings even as companies projected demand would improve and encourage the addition of more workers.

The National Federation of Independent Business’s optimism index was little changed at 94 last month from 94.1 in July. Five of the measure’s 10 components improved, while four declined, the Washington-based group said.

The net share of companies expecting business conditions to improve during the next six months dropped 4 points to minus 10 percent, and the share of those with positive earnings trends dropped 13 points to minus 35 percent. At the same time, the share of business owners expecting higher sales rose 8 points to 15 percent in August, while those planning to hire more workers climbed 7 points to 16 percent, the highest since January 2007.

“Overall, the index of optimism says the small-business sector is going nowhere and that’s what if feels like,” William Dunkelberg, the group’s chief economist, said in a statement. The differences in expectations for business conditions and sales improvement are “paradoxical at the macro level, although with differing regional economies, possible.”

The NFIB report was based on a survey of 759 small-business owners through Aug. 30. Small companies represent more than 99 percent of all U.S. employers, according to the U.S. Small Business Administration. A small business is defined as an independent enterprise with no more than 500 employees.

To contact the reporter on this story: Victoria Stilwell in Washington at vstilwell1@bloomberg.net

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net

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