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Optimism Among Small Business Owners Falls In December

Written by Jenna Weiner
Published: 1/11/2011

Latest indications reveal an unexpected drop in confidence following a period of optimism in the small business sector.

After scores of surveys reporting positive small business news, the most recent Index of Small Business Optimism from the National Federation of Small Businesses has found a surprising drop in confidence.

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According to the index, which was released Tuesday, small business optimism dropped by 0.6 points in December, from 93.2 in November to 92.6. This most recent finding comes as a disappointment to many analysts who had hoped that confidence would be boosted by a record-breaking holiday shopping season.

However, expectations were foiled by weak sales, stagnant hiring and low spending on capital projects, the NFIB writes.

"The hope for a pick-up in the small business sector did not materialize, but new weaknesses did not appear either," said William C. Dunkelberg, chief economist for the National Federation of Independent Business. "Overall, owners remain stubbornly cautious and uncertain about the future course of the economy and their business prospects."

This was the first time in four consecutive months that the index fell. It has remained below pre-recession levels for the past 36 months.

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