The optimism of small businesses decreases in the middle of economic uncertainty

The optimism of small businesses struggle as the stock markets drop and that a range of macroeconomic and political uncertainties weighs Commercial prospects.

The optimism index of the National Federation of Independent Affairs (NFIB), which measures the feeling among owners of small businesses, dropped 2.1 points in February. The group’s uncertainty index also recorded its highest second reading of all time.

The 12% of business owners indicating that it is the right time to invest and expand was down 5 percentage points compared to January – the highest monthly decrease in five years.

Small businesses meet fragile economic conditions by increasing their prices, according to the NFIB survey. The percentage of owners increasing prices increased by 10% in February at the highest level in about four years, while the drop in prices on the part decreased by 10%.

The drop in feeling among business owners reflects a decrease in February Feeling of consumers.

The University of Michigan said that consumer feelings slipped by 10% from January. Expectations for personal finances and short -term economic prospects have decreased by around 10% while longer -term expectations in consumers have withdrawn by 6%.

Consumers have considerably fell off their expenses in January, personal consumption expenses decreasing by $ 31 billion or 0.2%, according to data from the Commerce Department.

The January issue was the first time in two years that consumer spending has decreased on a monthly basis rather than simply slowing down.

The markets have also been broadcast in recent weeks. The industrial average of Dow Jones of large American actions decreased by more than 200 points at the start of negotiation on Tuesday and lost more than 6.5% of its value in last month.

The S&P 500 index is down more than 7.5%in the last month, the Russell 2000 index of small American companies is more than 10%, and NASDAQ, heavy with technology, is down more than 11%.

The trigger for the drop in equity values ​​in the past two weeks seems to have been an uncertainty about the prices. The Trump administration has announced prices several times, then reversed orders in part or in all, leading to reprisals of the best American business partners China and Canada.

China has published two tariffs on American sustainable goods and materials, and the Canadian province of Ontario imposed on Monday an overload of electricity in three American states that would affect more than a million houses. The impact in dollars of Canada’s electricity prices is moderate, according to Industry experts.

Under political uncertainty, some signs of macroeconomic warning flash. Inflation in the consumer price index increased during the drop in an annual increase of 2.4% in September to 3% in January while the Federal Reserve began to reduce interest rates, which it has since interrupted.

The Atlanta Federal Reserve provides for a 2.4% contraction of gross domestic product (GDP) for the first quarter, and some commentators have warned of the prospect of a recession. Despite numerous recession forecasts in the past two years, global macroeconomic conditions have remained strong, the GDP growth sold until the end of last year and low unemployment.