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Small Business Optimism Weakens in May


June 27 – Small business optimism fell for the third consecutive month in May, reported the National Federation of Independent Business (NFIB).

The NFIB monthly Index fell 0.3 points to 90.9 last month driven in large part by the fact that one in four business owners surveyed reported weak sales as their top business problem," said the NFIB report.

"Consumer spending is weak, especially for 'services,' a sector dominated by small businesses," the report continued. Inflation is also a growing concern among survey respondents.

"Corporate profits may be at a record high, but businesses on Main Street are still scraping by," said Bill Dunkelberg, NFIB chief economist. He pointed to "misdirected policies" from Washington as failing to address some of the core problems affecting small business.

"The failure to understand why small-business owners are not hiring or investing has resulted in a set of policies that have not been very effective, and Main Street is suffering," Dunkelberg said. "The icing on the cake: the growing debt, large deficits, threats of higher taxes, regulations being spewed out by state and local administrations, and the uncertainty of the new health care law—is it any wonder that optimism is down?"

Download the complete 23-page report.