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Optimism among U.S. small-business owners fell in August to the lowest level in five months, with the outlook for the economy and sales slumping amid escalating trade tensions and recession fears.
The decline of 1.6 points to 103.1 in the National Federation of Independent Business’ index resulted from weaker expectations for businesses and sales, according to a report Sept. 10. The reading was below the median estimate of analysts surveyed by Bloomberg.
Economists are watching indicators of business and consumer sentiment for signs that the tariff war and manufacturing slowdown will affect growth more broadly. Such indicators have been mixed in recent weeks, with Conference Board and Bloomberg measures of consumer confidence holding up and a University of Michigan gauge faltering.
“Uncertainty increasing is a problem,” NFIB CEO Juanita Duggan said in a Bloomberg Television interview Sept. 10. “Normally in this survey when you ask our small business owners, are you going to invest, they usually say ‘yes’ or ‘no.’ But when they start to say ‘I don’t know,’ that tells us they don’t know what to expect.”
Even with the decline, the NFIB gauge remains elevated by historical standards, though it’s below the average level since Donald Trump was elected president in 2016.
Other measures in the survey showed improvement. Hiring grew to an average addition of 0.19 employee per firm from 0.12 in July, while the share reporting quarterly profit growth increased.
Job gains improved despite a record 57% of respondents saying there were few or no qualified applicants for openings, adding to signs of a tight labor market with unemployment at 3.7%.
The latest survey was based on responses from 680 NFIB members through Aug. 30.