Small Business Owners More Pessimistic on Economy

Washington, DC, Aug. 10, 2010--Small business owners grew more pessimistic in July on expectations of weaker economic growth in the second half of the year.

The National Federation of Independent Business (NFIB) said its optimism index fell 0.9 points to 88.1 in July.

"Virtually all of the decline was due to weaker expectations for business conditions six months from now," said William Dunkleberg, the group's chief economist.

Only 2% of respondents said they had plans to create new jobs, which is double June's reading.

Only 12% of small business owners reported raising average selling prices, while 24% said they were cutting prices.

"With no pricing power and real sales volume weak, profits are not able to recover," the report said. "Inflation is clearly not a problem."

In a separate survey, confidence among U.S. chief executive officers fell this quarter for the first time in a year as their outlook on sales, employment and the economy weakened.

The Young Presidents’ Organization’s gauge of sentiment fell to 57.5 in July from 61 in April, according to the Dallas-based group. A reading higher than 50 shows more chief executives had a positive outlook than a negative one.