Weaker US small busi­ness con­fi­dence bucks firm­ing data

The Pak Banker - - 6BUSINESS -

U.S. small busi­ness con­fi­dence de­clined fur­ther in Fe­bru­ary as lin­ger­ing con­cerns about sales growth and prof­its hurt cap­i­tal spend­ing and hir­ing plans, a sur­vey showed on Tues­day.

The Na­tional Fed­er­a­tion of In­de­pen­dent Busi­ness (NFIB) said its small busi­ness op­ti­mism in­dex dropped one point to a read­ing of 92.9 last month, with none of the in­dex's com­po­nents show­ing an in­crease. The in­dex de­creased 1.3 per­cent­age points in Jan­uary.

"Spend­ing and hir­ing plans weak­ened a bit as ex­pec­ta­tions for growth in real sales vol­umes fell. Earn­ings trends wors­ened a bit as own­ers con­tin­ued to re­port wide­spread gains in worker com­pen­sa­tion while hold­ing the line on price in­creases," the NFIB said in state­ment.

The sus­tained weak­ness is at odds with eco­nomic data such as em­ploy­ment, con­sumer spend­ing and man­u­fac­tur­ing that have sug­gested a pick-up in eco­nomic ac­tiv­ity af­ter growth slowed to a 1.0 per­cent an­nu­al­ized rate in the fourth quar­ter.

Gross do­mes­tic prod­uct growth es­ti­mates for the first quar­ter are cur­rently above a 2 per­cent rate. Six com­po­nents of the NFIB in­dex fell last month, while the re­main­ing four were un­changed.

La­bor mar­ket gauges soft­ened slightly and the NFIB said that likely re­flected the tepid eco­nomic growth in the fourth quar­ter as the em­ploy­ment ques­tion in the sur­vey was back­ward look­ing.

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