NEW YORK – Small business optimism slipped to 94.4 in May from 94.5 in April, an historically low reading consistent with the sub-par performance of GDP and employment growth, according to the National Federation of Independent Business' monthly Small Business Optimism index published Tuesday.
The individual indicators were mixed, with expected sales in a three month decline. However, some employment components improved and profit trends remained relatively stable after its sharp gain in April.
"In the last year, small-business optimism has limped along, and today the sector is no better off than it was just over a year ago," said NFIB Chief Economist William Dunkelberg. "The lack of progress is discouraging, producing no signs that economic activity will pick up this year at all. The calculus of spending decisions requires an estimate of future sales, tax rates, interest rates and credit availability, labor costs, health-care costs, regulatory compliance costs, all of which are very uncertain. Most of this uncertainty is the result of what is happening - and not happening - in Washington. Investments in jobs or plant and equipment are not the priority while people are still bracing for the worst."