Small business optimism slips, employment shows modest improvements

Though small business optimism slipped slightly last month, the National Federation for Independent Businesses (NFIB) survey showed that profits have marginally increased and employment levels are starting to stabilize.

The monthly survey, whose June results were released this week, showed that the small business optimism index fell one point to 87.9, down from May's 88.9.

The month's reading marks a bump in the past three month's steady gain of 7.9, reported Reuters.

Continuing a trend of negative sales that has stretched since July 2007, a record number of business owners reported that sales are down.

In light of the current credit crunch and low business spending, the number of business owners applying for small business loans is at 30 percent - a historically low number, but only slightly below the 20-year average, the NFIB reported.

Inventories were also down, influenced by a similar decline in capital outlays.

Although the majority of small business owners reported declining profits, the number of respondents improved by three points from May's number.

In addition, the number of firms who plan to increase hiring increased by four points, the number of small businesses with job openings increased two points, and the level employment declined at a slower pace than recent months.

"The economy is bouncing along the bottom and reorganizing itself to restart the growth process," William Dunkelberg, chief economist for the NFIB, told Reuters.