U.S. small business sentiment falls in October -NFIB – Reuters

by | Nov 8, 2022 | Business

Nov 8 (Reuters) – U.S. small-business confidence edged down in October as stubbornly high inflation weighed on sentiment and more owners forecast a deteriorating outlook for the economy, a survey showed on Tuesday.The National Federation of Independent Business (NFIB) said its Small Business Optimism Index fell 0.8 point to 91.3 last month to the lowest level since July. The retreat came after two straight months of gains, which followed a deterioration over the first half of this year.Thirty-three percent of owners reported that inflation was the single most important issue in operating their business, up three points from September and four points below July’s reading, which was the highest share since the fourth quarter of 1979.The U.S. Federal Reserve has raised interest rates from near-zero at the beginning of this year to a current range of 3.75% to 4.00% as it battles price pressures that have been running around 40-year highs for months.Inflation has also been a flashpoint among voters ahead of Tuesday’s midterm elections, which Democrats fear could see them lose control of one or both chambers of Congress to their Republican opponents.Last week Fed Chair Jerome Powell signaled the central bank hopes to slow the pace of rate hikes as early as its next policy meeting on Dec. 13-14, but that it now expects rate increases to go on for longer with rates ultimately ending higher than previously thought. Inflation remains, by the Fed’s preferred measure, more than three times its 2% target.With inflation still high and the full effect of the Fed’s tightening of credit yet to fully reverberate through the economy, the share of owners expecting better business conditions over the next six months dropped 2 points last month from September to a negative 46%. The NFIB’s Uncertainty Index remained unchanged in October from the prior month.The survey also showed 46% of owners reported job openings that were hard to fill last month, also unchanged from September. Governme …

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