Small Business Sentiment Slips Again in July

Politics Reuters

U.S. small business sentiment fell for a third straight month in July as owners worried about sales revenue against the backdrop of weak domestic demand, an independent survey showed on Tuesday.

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The National Federation of Independent Business said its optimism index eased to 91.2 last month from 91.4 in June.

The drop largely reflected concerns by owners over profits after consumer spending slowed sharply in the second quarter, holding back economic growth to a 1.5% annual pace after
a 2% rate in the first three months of the year.

More owners expect inflation-adjusted sales volumes to be lower than higher over the next three months.

About 26% of owners expect sales to improve over the next 3 months, down 3 points from June. The share of owners expecting sales to fall increased 3 points to 28%. The numbers are not adjusted for seasonal fluctuations.

Only 17% reported profits were higher, up one point from June, while 38% said profits were falling. That was up one point from June. 

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With demand softening, more firms plan to reduce inventory than to add to new stocks.