Small Business Optimism Falls in December

Washington, DC, Jan. 11, 2011 -- Confidence among U.S. small businesses fell in December for the first time in five months, according to the National Federation of Independent Business optimism index.

NFIB said its index decreased to 92.6 from November’s 93.2 reading, which was the highest since the recession began in December 2007.

Four of the index’s 10 components fell.

“The hope for a pickup in the small business sector did not materialize,” said William Dunkelberg, the group’s chief economist, said in a press release.

“Owners remain stubbornly cautious and uncertain about the future course of the economy and their business prospects.”

The report reflects an economic recovery that hasn’t been strong enough to reduce unemployment, which has exceeded 9% for 20 straight months.

The gauge of expectations for better business conditions six months from now fell 7 percentage points to a net 9%, today’s report showed. An index of whether firms think this is a good time to expand fell 1 point to a net 8%.

A measure of earnings fell 4 points to minus 34%. At the same time, the net% of small business owners projecting higher sales, adjusted for inflation, climbed 2 points to 8%.