A worker removes a vinyl record from a printing press at Third Man Pressing's manufacturing facility in Detroit. (Elon Paz/Bloomberg News)
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U.S. small business optimism in January suffered its biggest drop in more than a year, due to deteriorating earnings and declining sales expectations, according to a report from the U.S. investment bank. National Federation of Independent Business.
Groups General indicator It fell two points to 89.9, the largest monthly decline since December 2022. The share of owners expecting real sales volumes to rise fell 12 percentage points, the most since mid-2022, compared to the previous month.
Additionally, a larger percentage of small business owners reported a decline in their profits over the past three months.
“Small business owners continue to make appropriate business adjustments in response to the ongoing economic challenges they face,” Bill DunkelbergNFIB's chief economist said in a statement.
“A more positive outlook for the future economy and economic policy would help stimulate long-term investment spending, but at the moment, owners’ views on the future are not supportive and financing costs are too high,” he said.
The share of landlords planning to boost hiring fell to the lowest level since May 2020. 39%, the smallest share in three years, had job openings they were unable to fill, with the overwhelming majority continuing to cite a shortage of qualified candidates.
Meanwhile, 15% of owners reported reducing sales prices, representing the largest share since August 2020.
While inflation is calming down and becoming less of a concern among businesses, a significant portion of owners still consider it the most important concern in running their business.
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