After five straight months of gains, small business optimism declined in June, according to the National Federation of Independent Businesses Small Business Optimism Index.
The index dropped 4.2 points for the month to 94.1, below the pre-recession average of 99.5
“June terminated a promising string of improvements in owner optimism during the first months of the year,” said Bill Dunkelberg, NFIB chief economist. “While it is not a disaster or a signal of a looming recession, it is a disappointing sign that economic growth on Main Street is not set for a strong second half of growth. The weakness was substantial across the board, showing no signs of a growth spurt in the near future.”
Ten of the 11 components dropped for the month, with small business owners less inclined to hire, invest or make capital outlays, the NFIB said.
Dunkelberg said the decreased optimism has been caused by recent actions by President Obama and recent decisions by the U.S. Supreme Court.
“The President continues to push regulations to pay people more in higher wages, more overtime, health insurance, etc.,” he said. “However, he does not pursue policies that help increase productivity. Higher pay with the same output means inflation or unemployment or both, neither being good for workers or businesses.”