Automatic Data Processing : U.S. June Small-Business Optimism Index Falls
07/10/2012| 08:06am US/Eastern
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--NFIB small-business optimism index falls steep three points to 91.4 in June
--Reading is lowest since October
--Hiring conditions worsen
Small-business owner confidence dropped significantly in June, as sales expectations continued to drop, according to data released Tuesday.
The National Federation of Independent Business's small-business optimism index fell 3 points to 91.4 last month. The June reading was the lowest since October.
The NFIB said the three-point drop was a "substantial decline," and the index level is "surely an indication of slow growth."
The report noted the survey was completed before the Supreme Court decision on the health-care law and the federal transportation bill. Impacts from either will show up in the July survey, said the NFIB, which had been a plaintiff in the health-care case.
The downward slide in sentiment among small business echoes other data that suggest economic activity stumbled in June. "The economy definitely slowed mid-year," the report said. And while the NFIB doesn't expect a recession, growth will be slower than earlier in 2012.
Small-business owners are worried about future sales and earnings. The subindex of expected business conditions in the next six months dropped a large eight percentage points to -10% last month, and the expected higher real sales subindex declined fell five points to 3%.
The net earnings trend subindex weakened seven points to -22% in June.
Hiring conditions deteriorated. The June new-jobs subindex declined three points to 3%. The NFIB said the net change in employment per firm over the past three months was -.11, the first negative reading since December.
Price pressures among small businesses remain muted. Seasonally adjusted, the net% raising selling prices remained at 3% in June.
Write to Kathleen Madigan at kathleen.madigan@dowjones.com
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