U.S. small businesses slowly becoming more optimistic

WASHINGTON, June 8 (BestGrowthStock) – U.S. small businesses are
slightly more optimistic about their economic outlook than they
have been in the last two years but are still not ready to
expand staffs and boost capital spending, according to a survey
released on Tuesday.

The National Federation of Independent Business said its
survey showed the second straight month of gain in its small
business optimism index in May. It was up 1.6 points in the
month bringing the index to 92.2, the highest reading since
September 2008.

“Seven of the 10 index components rose, but job creation
and capital expenditure plans barely gained and remained at
recession levels,” the NFIB concluded.

“The recovery in optimism we are currently experiencing is
very weak compared to recoveries after 1982 or 1975,” the
survey concluded. “The May Optimism index is a shade better
than April but remains well below the other recovery
trajectories.”

At the same time, more business owners expect conditions to
improve in the next six months, the survey showed.

NFIB chief economist William Dunkelberg said the biggest
concern of small business owners is weak sales and until that
turns around, they will not be inclined to hire new staff or
invest in new equipment.

The NFIB survey of 823 businesses through the end of May
showed that more small businesses are experiencing weakening
sales than are enjoying sales improvement. Widespread price
cutting was also reported, it said. May was the 18th
consecutive month in which more business owners reported
cutting average selling prices than raising them.

“The Fed is right, the likelihood of inflation breaking out
in the near term is low, but the picture is changing and could
change quickly,” the NFIB report concluded.

Small businesses account for about half of gross domestic
product and many analysts do not see U.S. employment picking up
much until small firms begin hiring.

Dunkelberg said the survey results reflect dissatisfaction
with current economic policies and concerns about the impact
of the European debt crisis on the U.S. economy. He said the
uncertainty was feeding reluctance by small business owners to
hire and take on new risk.

Stock Market Advice
(Reporting by Donna Smith; Editing by Kenneth Barry)

U.S. small businesses slowly becoming more optimistic