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US small business sentiment index drops to worst level since 2016 elections

By Michele Maatouk

Date: Tuesday 12 Feb 2019

(Sharecast News) - Small business sentiment in the US deteriorated more than expected in January amid worries about the government shutdown and financial market instability, according to the National Federation of Independent Business.
The small business optimism index fell to 101.2 from 104.4 in December, missing expectations for a reading of 103.2. This marked the lowest level for the index since the weeks leading up to the 2016 elections and remains well below the historical average of 98.

"Business operations are still very strong, but small business owners' expectations about the future are shaky," said NFIB President and CEO Juanita D. Duggan.

"One thing small businesses make clear to us is their dislike for uncertainty, and while they are continuing to create jobs and increase compensation at a frenetic pace, the political climate is affecting how they view the future."

NFIB chief economist Bill Dunkelberg said that while January's index showed some positive developments among current business conditions, the return to divided government in Washington created an inability to agree on basic policy measures.

"This produced the longest partial government shutdown in history, elevating the level of uncertainty, which is damaging to economic activity," he said.

The NFIB's uncertainty index jumped seven points in January to 86, marking the fifth highest reading in the survey's 45-year history.

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