Economic Uncertainty Results In Drop In Optimism Among US Small Business Owners

According to a report by the National Federation of Independent Business (NFIB) of the United States, the uncertainty of the future of economic growth has resulted in the fall in optimism among small businesses in the US in the month of January to a level that is the lowest in the last two years.

The NFIB said that the index of small business optimism dropped by 3.2 points to touch a low of 101.2 last month which is the lowest point hit by the index since November 2016. It also added that concerns over the growth of sales in the future and the overall business conditions that were prevalent last year in the country were expressed by owners of small businesses in the US.

According to the NFIB, the fall in the value of the index clearly indicated the existence of uncertainties among the owners of small business because of the 35-day partial government shutdown in the US and the instability in the financial market, even though the index was still higher than the historical average of 98.

“The return to divided government in Washington created an inability to agree on basic policy measures,” NFIB chief economist Bill Dunkelberg said in a statement. “This produced the longest partial government shutdown in history, elevating the level of uncertainty, which is damaging to economic activity,” he said.

The partial US government shutdown of 35 days, which was amongst the longest in the history of the country, came to an end in late January after the White House and president Donald Trump and the congressional lawmakers came to an agreement to fund the functioning of the government for a period of just three weeks when there would be negotiations between the two parties over border security.

They have reached “an agreement in principle” on spending and border security so that the US can avert another government shutdown, said House and Senate bipartisan negotiators on Monday night. On Friday night, the temporary government funding bill would come to an end.

On the other hand, according to the CNBC/SurveyMonkey’s small business survey which was released on Monday, the recent partial government shutdown had negatively impacted more than one-third of small business owners in the US. There was a slowdown in sales, said about 35 percent of small business owners throughout the US, the survey report showed, where in the owners blamed a reduction in demand from nearby federal workers. The survey also found that “direct loss of revenue from a contract with a government agency” was also reported by about 13 per cent of the small business owners surveyed.

(Adapted from

Categories: Economy & Finance, Geopolitics, Regulations & Legal, Strategy, Sustainability, Uncategorized

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