NEW YORK — The economy and uncertain political climate are taking a toll on small business owners' optimism, making them hesitant to expand.
The National Federation of Independent Business said its index of small business owners' sentiment fell 3 points in June to 91.4 after edging lower in May.
The index, compiled from a survey of NFIB members, shows that business owners are concerned about the economy. The number of owners expecting business conditions to improve in six months fell 8 percentage points and the number expecting their sales to rise slid 5 percentage points. Nearly a quarter of those surveyed say their biggest problem is weak sales.
Owners said they are scaling back plans to hire and to buy equipment. That's a troubling sign for the U.S. labor market, which is struggling to gain traction.
“This month's survey was a real economic downer,” said NFIB Chief Economist William Dunkelberg. “The economy has definitely slowed; job growth will be far short of that needed to reduce the unemployment rate.”
Small businesses also are hesitant to expand because of high political uncertainty, the NFIB said. With the results of the presidential and congressional elections four months away, owners don't know what to expect in terms of taxes and government regulations.