WASHINGTON, June 13, 2010 – US small business confidence rose in May, but worries about the economic outlook and inflation persisted, a survey released on Tuesday showed that businesses are still looking to hire more workers.
The National Federation of Independent Business (NIB) said its small business optimism index rose 0.4 points last month to 89.4. It was the 17th straight month that the index remained below its 49-year average of 98.
The share of owners expecting better business conditions in the next six months fell one point to a net negative 50%. Expected net negative 21% higher inflation-adjusted sales, down two points from April.
Twenty-five percent of small business owners say inflation is their top concern, up two points since April. But the share was down 12 points from last July, the highest reading since the fourth quarter of 1979.
Despite persistent worries about inflation, inflationary pressures are easing as aggressive interest rates proposed by the Federal Reserve starting in March 2022 have buoyed demand.
A Reuters poll of economists said on Tuesday that government data on the consumer price index was expected to show a 0.2% increase in May after a 0.4% increase in April. In the 12 months to May, CPI is forecast to rise 4.1 percent. This is the smallest year-on-year gain since March 2021 and follows a 4.9% gain in April.
Economists expect the Fed to keep its policy rate unchanged on Wednesday for the first time in more than a year.
The NIFB survey found that 44% of employers reported job openings that were difficult to fill, a decrease from April. A net 19% plan to create new jobs in the next three months, which is two points higher than April. 63% reported hiring or trying to hire in May, up 3 points from April.
Strong employment by small businesses partly explains labor market resilience. The government reported this month that nonfarm payrolls increased by 339,000 jobs in May.
Reporting by Lucia Mutikani; Editing by Paul Simao
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