Concerns about the U.S. economy after the partial federal government shutdown and volatility in financial markets drove a reading of small business owners' confidence lower for the fifth consecutive month, according to the National Federation of Independent Business.
The conservative-leaning small-business group said its optimism index fell to 101.2 in January from 104.4 a month earlier. Economists had expected a reading of 102, according to a Wall Street Journal poll. The NFIB said the January reading remains higher than the historical average, but hit its lowest level since the weeks prior to the 2016 elections.
The NFIB survey is a monthly snapshot of small businesses in the U.S., which account for about half of private-sector jobs. Economists look to the report for a read on domestic demand and to extrapolate hiring and wage trends in the broader economy.
"Business operations are still very strong, but small business owners' expectations about the future are shaky," said NFIB Chief Executive Juanita Duggan in prepared remarks. "One thing small businesses make clear to us is their dislike for uncertainty, and while they are continuing to create jobs and increase compensation at a frenetic pace, the political climate is affecting how they view the future."
In the latest survey, hiring and hiring plans remained strong though some respondents were concerned about a deterioration in conditions that would support expansion, the NFIB said.