WASHINGTON (Reuters) – U.S. small business optimism tumbled last month to its lowest level since President Donald Trump’s election more than two years ago amid growing uncertainty over the economic outlook.
The National Federation of Independent Business said on Tuesday its Small Business Optimism Index dropped 3.2 points to 101.2 in January, the weakest reading since November 2016.
The index surged after Trump’s electoral victory, boosted by his administration’s $1.5 trillion tax cut package and deregulation policy. It has declined for five straight months since hitting an all-time high last August, but remains high by historic standards.
Still, the index mirrored other confidence surveys, which weakened sharply last month.
“We believe the apparent boost to the survey data from increased partisanship since the 2016 election is starting to fade,” said Jim O’Sullivan, chief U.S. economist at High Frequency Economics in White Plains, New York.
The NFIB said its uncertainty index jumped 7 points to 86 last month, the fifth highest reading in the survey’s 45-year history. The rise in uncertainty coincided with the longest partial shutdown of the federal government in history.
The 35-day shutdown ended on Jan. 25 after Trump and Congress agreed to temporary government funding, without money for his U.S.-Mexico border wall.
The NFIB said “there is more talk about recession risk. It noted that small business owners worried “about future sales growth, some weakness in business conditions later in the year and some deterioration in conditions that would be supportive of business expansion.”
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