| NEW YORK
NEW YORK Feb 25 U.S. small business confidence
improved this month for the first time since July, but more
than two-thirds of those surveyed still felt the economy was
Credit card provider Discover's Small Business Watch index
rose to 90.9 in February from January's 86.3, reflecting some
reassurance in the Federal Reserve's string of interest rate
cuts and a planned $150 billion stimulus package from
But a hefty 67 percent of respondents believe conditions
are getting worse, and 43 percent said they experienced "cash
flow issues" in the last 90 days.
The U.S. economy has been gripped by a housing crisis that
has spread deep into the financial system, denting investor
confidence and battering the stock market.
The survey pointed to doubts about the effectiveness of
government efforts to stem the crisis. Fifty-nine percent of
small business owners said they did not expect the rescue
package to benefit their firms directly.
"The recent state of the economy has been affecting small
business owners at work and at home," the report said.
"Forty-one percent of owners said current economic
conditions have forced them to reduce business spending, and 67
percent report having to curtail personal spending. Another 55
percent have been forced to reduce the amount of money they
take out of their businesses."
In this context, the overall gain in confidence was an
encouraging sign, but only a very preliminary one.
If the goal of politicians in Washington is for the tax
rebate plan to be spent as quickly as possible, they should
expect mixed results.
Of 4,000 consumers polled separately by Discover, 59
percent said they expect to receive a rebate under the package.
Of those, 53 percent planned to spend it, 33 percent planned to
save it and 14 percent were not sure how they would use it.
(Editing by Dan Grebler)