Small US firms less confident amid heightened uncertainty, NFIB says

Uncertainty among smaller sized businesses in the US rose "substantially" in June, reaching its highest level since March 2017, the results of a closely-followed survey revealed.

The National Federation of Independent Businesses's small business optimism index dipped by 1.7 points from May to reach 103.3.

"As expectations for sales gains and the general business environment faded, uncertainty levels increased," said NFIB Chief Economist William Dunkelberg.

"Still, job openings and plans to create jobs remain historically very strong, and while it’s not as ‘hot’ as May, Main Street is still running strong."

Capital outlays and sales and earnings trends all softened, NFIB said, and the proportion of owners expecting credit conditions to tighten was twice that of those expecting them to ease, although the majority were anticipating no change.

Nevertheless, according to Ian Shepherdson at Pantheon Macroeconomics, the most noteworthy development last month was the seven point increase to a net 17% in the net percent of owners lifting their average selling prices.

"The index usually is responsive to gasoline prices, which dipped last month, pointing to a two-point dip. Adjusted for the impact of gas prices, this is the highest reading for the selling price measure since November 2006, and it is consistent, if sustained, with core CPI inflation rising to 2.7% by next spring," Shepherdson said.

"We assume this jump reflects the increase in tariffs on Chinese imports in May, from 10% to 25%, so we doubt it will reverse anytime soon."