January 11, 2011 / 3:00 PM / 9 years ago

Small business confidence eases in December

Attendees at a job fair line up for an interview carrying their resumes in leather bags in a Washington hotel in this August 6, 2009 file photo. REUTERS/Jason Reed

WASHINGTON (Reuters) - Confidence among small U.S. businesses fell slightly in December as owners remain cautious about their prospects and uncertain about the country’s economy, according to a survey released on Tuesday.

The National Federation of Independent Business’ optimism index fell 0.6 points to 92.6, with the biggest drop in the number of owners expecting better conditions in six months.

However the decline comes after small business confidence touched its highest level in almost three years in November.

“Owners remain stubbornly cautious and uncertain about the future course of the economy and their business prospects,” the NFIB said. “Still, (there is) a long way to go to reach levels that would give comfort to the expectation of a stronger recovery in the small business sector.”

Five of the index’s 10 components eased. Owners were less optimistic about easier credit conditions, expansion and positive earnings trends, according to the survey.

Regardless, the survey found that businesses expected to create new jobs, planned to spend on capital and expected higher sales.

Over the next three months, 10 percent of businesses surveyed planned to increase employment while 9 percent intended to lay off workers.

“Overall, job creation is likely to continue, but at a tepid pace, far below the 300,000 plus figure needed each month for the next three years to keep up with population growth and restore most of the jobs lost in the recession,” NFIB said.

“Until sales pick up, there is no pressing reason to hire.”

Reporting by Rachelle Younglai, Editing by Chizu Nomiyama

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