Slowly but surely, small business optimism had been improving over the last several months.Not anymore.
Small business owners’ spirits plummeted last month, according to the National Federation of Independent Business’ latest optimism index, which dropped to an eight-month low of 91.4 in June, completely erasing modest gains over the first five months of the year. The drop from 94.4 in May marks the largest month-to-month decline since June 2010.
“All in all, this month’s survey was a real economic downer,” NFIB Chief Economist William Dunkelberg said in a statement. “The economy has definitely slowed; job growth will be far short of that needed to reduce the unemployment rate unless lots of unemployed leave the labor force—no consolation.”
Deepening concerns over earnings, raw sales and political uncertainty pulled the reading down. Even more alarmingly, given the stubbornly high unemployment rate and small businesses’ reputation as a consistent job engine, the net change in employment per company dropped last month for the first time this year.