U.S. Small-Business Optimism Declines to an Eight-Month Low

Optimism among U.S. small businesses fell in January to an eight-month low as the outlook for economic conditions deteriorated sharply.

The National Federation of Independent Business index of sentiment decreased by 0.5 points to 95, the third-straight decline, the group said Tuesday. The figure was weaker than the median projection of 96.8 in a Bloomberg survey of economists.

Weak consumer spending and softer economic growth at the end of 2020 weighed on expectations as small-business owners became the most pessimistic since November 2013 about the outlook for general business conditions.

“As Congress debates another stimulus package, small employers welcome any additional relief that will provide a powerful fiscal boost as their expectations for the future are uncertain,” Bill Dunkelberg, NFIB chief economist, said in a statement. “The Covid-19 pandemic continues to dictate how small businesses operate and owners are worried about future business conditions and sales.”

Sales expectations and earnings trends fell in January, the NFIB data showed. Plans to add jobs and boost capital spending were unchanged from a month earlier, while the share of owners thinking it’s a good time to expand also held steady.

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