Economic confidence is dropping, according to recent surveys.
A vast majority of small-business owners now see business conditions deteriorating over the next six months, according to a survey by the National Federation of Independent Business released Tuesday.
“Owners tempered their expectations of future economic conditions as the COVID-19 public health crisis is expected to continue through the coming months,” the report states.
The survey also showed that only a minority of owners, 5%, expect sales to increase over the next six months.
“This summer has been challenging for many small-business owners who are working hard to keep their doors open and remain in business,” said NFIB’s Chief Economist Bill Dunkelberg. “Small business represents nearly half of the GDP, and [in July], we saw a dip in optimism.”
Gradual improvements in consumer expectations came to a halt in July, according to a Federal Reserve Bank of New York survey released Monday. The report showed an increase in July from June in respondents who think the unemployment rate will be higher a year from now.
Employment gains slowed in July, with 1.8 million jobs being created, versus the 5 million jobs created in May and June, according to the Labor Department.
One issue hindering the recovery is the spike in coronavirus infections in several states. With over 5 million cases in the United States, several states have either rolled back or paused reopening their economies to help stem the increase of infections.
The increased concern over jobs has prompted more respondents to expect their financial situation to worsen over the next year, according to the Fed survey.
The findings by the Fed and NFIB surveys come on the heels of a July 24 report by Richard Curtin, director of the University of Michigan Surveys of Consumers, that shows no evidence that consumers expect the current recession to end soon.
“What people are believing now is they need more savings to hedge any future development in the pandemic,” Curtin told Axios.
