By Patrick Thomas
Small-business owners' confidence in the U.S. economy rose in July after slipping the prior month, according to the National Federation of Independent Business.
The NFIB Small Business Optimism Index had a July reading of 104.7, up 1.4 points from the prior month. The NFIB said expectations for sales gains increased after fading the previous month.
"This is a confirmation that small business owners remain very optimistic about the economy despite all the talk about 'slowing,'" the NFIB report said. "Expectations for business conditions, real sales, and expansion posted solid gains."
Overall, seven components in the index improved in July, two fell and one was unchanged.
The NFIB survey is a monthly snapshot of small businesses in the U.S., which account for nearly 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.
The NFIB survey results -- based on responses from 1,502 small-business owners last month -- showed the net percent of owners expecting higher sales volumes rose 5 points to 22% of owners. Earnings trends improved in July, supported by a solid improvement in sales trends, the report said.
The report noted that job creation slowed in July, adding just 0.12 workers per firm on average, trending down from 0.52 workers in February. The uncertainty index rose seven points to its highest level since March 2017, the report said.
"The small business sector continues to defy expectations with another exceptional month of strong optimism," the NFIB report said. "The major headwind facing them is a tight labor market."
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