US small business sentiment ebbs in August amid rising uncertainty

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Small-business confidence in the U.S. fell in August, reversing July’s gains due to growing uncertainty ahead of the November 5 presidential election and weakening sales expectations.

The National Federation of Independent Business (NFIB) reported that its Small Business Optimism Index dropped 2.5 points to 91.2, with the Uncertainty Index rising to its highest level since October 2020.

Concerns over inflation lessened slightly, but labor shortages continued to be a major challenge, particularly in the transportation, construction, and manufacturing sectors.

Business owners, who generally lean Republican, are feeling the strain of an uncertain political landscape.

The tight race between Donald Trump and Kamala Harris and a lackluster stock market have contributed to the drop in confidence.

A significant 40% of small-business owners reported job openings they could not fill in August, despite a slowdown in nonfarm payroll gains.

Although fewer businesses expect higher sales volumes, plans for capital investment increased, with businesses focusing on new equipment and facility upgrades. However, job creation plans remained low, reflecting ongoing challenges in the labor market.

Reuters

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