U.S. Small-Business Optimism Slumps to Seven-Month Low

U.S. small-business optimism slumped in December to a seven-month low as Covid-19 infections spread at a record rate and governments tightened restrictions on activity.

The National Federation of Independent Business index of sentiment decreased by 5.5 points to 95.9, the group said Tuesday. The figure was weaker than the median projection of 100.2 in a Bloomberg survey of economists.

Nine out of the 10 subindexes declined in December. As renewed lockdown measures continue to weigh on business activity, sales expectations dropped to minus 4%, the lowest since May. Additionally, a gauge of owners’ outlook for general business conditions fell to the lowest level since April 2016.

“Business restrictions and consumer spending shifts are still firmly in place and will be until the spread of Covid-19 is largely curbed,” Bill Dunkelberg, NFIB chief economist, said in a statement. “The U.S. economy moves into 2021 with many of the same challenges it faced in 2020 but new opportunities and challenges will certainly change the landscape going forward and small businesses will continue to adjust accordingly.”

The share of business owners thinking it’s a good time to expand business decreased 4 percentage points to 8%. Plans to add jobs and make capital expenditures also deteriorated.

©2021 Bloomberg L.P.

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