The Economy This Week
Weaker sales and a bleaker outlook are prompting small-business owners to scale back hiring and spending plans. Here's a look at this week's economic developments and how they may affect your business.
Small-Business Outlook Fades
Driven down by weaker sales, optimism among the nation's small-business owners continued to decline in March, prompting scaled back hiring and spending plans, the National Federation of Independent Business reported Tuesday.
The Washington-based lobby group's monthly small-business optimism index dropped to a 28-year low last month with declines in eight of ten components, including plans to increase employment and real sales expectations. The index is based on a survey of more than 700 small-business owners nationwide.
Only 20 percent of owners surveyed said they expected to create new jobs in the next three months, down one percent from February, while seven percent were planning layoffs. Just 25 percent were planning capital outlays.
"We are seeing recession readings," William Dunkelberg, the group's chief economist, said in a statement.
Despite the downturn, owners reported having no trouble accessing capital or credit. Only two percent cited credit availability as their top business problem, compared to a record-high 37 percent in 1982, the group reported.
Retail Sales Down
Growing concerns over the economy combined with an early Easter kept retail sales down to a 13-year low in March, the International Council of Shopping Centers reported Thursday.
Weaker sales were reported by clothing stores, department stores and luxury retailers, the trade group said.
By contrast, higher gas prices gave wholesale outlets a lift, including a five percent year-over-year sales increase at Costco.
Despite the economic downturn, April sales are expected to grow by up to 2.5 percent, the group said.
Jobless Claims Fall
Easing recent gains, the number of new claims for unemployment benefits fell by 53,000 last week to 357,000, the Labor Department reported Thursday.
The seasonally adjusted insured unemployment rate the previous week was unchanged at 2.2 percent, reflecting about 2.94 million jobless claims.
The biggest declines in new claims last week were in Pennsylvania, California, and Iowa, while gains were reported in Indiana, New York and Puerto Rico.