From National Federation of Independent Business

Business owners’ expectations for better business conditions tumbled in June along with plans to create jobs, according the National Federation of Independent Business (NFIB) monthly Index of Small Business Optimism, released recently.

“Small business optimism dropped in response to the gridlock in the Senate over the healthcare reform bill,” said NFIB President and CEO Juanita Duggan. “This happened in March, when optimism dipped after the House initially failed to repeal Obamacare. I hope every senator is paying attention, because small business owners are paying attention to them.”

The Index fell 0.9 points to 103.6. Four of the 10 components posted a gain. Five declined, and one remained unchanged.

“The Index remains at a historically high level, but within the Index there are signs of trouble that should be a concern,” said NFIB Chief Economist Bill Dunkelberg. “Fewer business owners expect business conditions to improve, and fewer expect sales to improve.”

Expected better business conditions fell 6 points, a significant drop, while expected sales dropped 5 points. Job openings (-4) and job creation plans (-3) also declined in June. On the positive side, inventory satisfaction increased by 3 points, and plans to increase inventory rose by 3 points.

“The data is a mixed bag and the overall Index remains strong by historical standards,” said Dunkelberg. “But there are signs that small business owners are less confident in the near-term future. That could be problematic if it continues.”

The Optimism Index shot up in November after the election based on the expectation that Congress and the President would reform taxes and healthcare.

“As Washington fails to deliver on those two priorities small business optimism is dropping,” said Duggan. “Gridlock is driving down small business optimism, which will eventually drive down the economy.”