Small US businesses increasingly fearful about economy: survey

WASHINGTON: Small businesses saw no light at the end of the Covid-19 tunnel as optimism about the US economy waned in January, according to an industry survey released Tuesday.

Following a third wave of coronavirus cases late last year, and as Congress debates a new round of government aid, the National Federation of Independent Business (NFIB) said its optimism index dropped 0.9 points to 95.0, three points below the average since 1973 and down from 104 in January 2020.

Even as hiring increased solidly, owners expecting better business conditions over the next six months declined seven points to the lowest level since November 2013, NFIB said.

January came in with a whimper as consumer spending tailed off sharply at the end of 2020, the report noted.

Small firms have benefitted from multiple rounds of government loans, and President Joe Biden's proposed $1.9 trillion rescue package would extend additional aid.

"As Congress debates another stimulus package, small employers welcome any additional relief that will provide a powerful fiscal boost as their expectations for the future are uncertain," NFIB Chief Economist Bill Dunkelberg said in a statement.

Ian Shepherdson of Pantheon Macroeconomics notes that the survey -- which had just over 1,000 responses -- has a "strong Republican bias" and despite the decline had returned to the level seen prior to the 2016 election won by former president Donald Trump.