Optimism Continues to Drop for Small Business

Small-business optimism fell once again, dropping another 1.6 points in March to 81.0, according to the National Federation of Independent Business's Small Business Optimism Index. The new level is the second lowest in the 35-year history of the survey, and the index has fallen for the last four months.

Components of the index measuring owner spending and hiring plans reached survey lows, according to NFIB. About 12 percent of the more than 800 small-business owners surveyed said they plan to reduce employment while 12 percent plan to add new jobs, yielding a seasonally adjusted net negative 10 percent of owners planning to add new jobs. That's a full seven points lower than in February.

Small business plans to spend money fell to 16 percent, and only 1 percent of business owners said it is a good time to expand, a worse reading than in the 1990 recession.

Expectations for gains in real sales fell 2 points to a net negative 31 percent, the worst reading on record. A net negative 22 percent expect the economy to improve, down 1 percent from February.

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