Rising labor costs and fewer qualified job-seekers had the nation's small-business owners feeling less confident about the economy, while colder weather kept many shoppers at home. Here's a look at this week's economic developments and how they may impact your business.

Employer Optimism Drops

Higher labor costs and lower earnings in February had small-business owners feeling less optimistic about the economy, the National Federation of Independent Business reported on Tuesday.

Based on a survey of 725 employers nationwide, the Washington-based lobby group's monthly small-business optimism index dropped 0.7 points last month to 98.2, below its benchmark level of 100.

Fewer owners in February reported plans to increase employment or expected an upturn in sales or business conditions any time soon, the report said.

Nearly one in four businesses said they had lower earnings last month than over the previous three months, citing weaker sales, higher material costs, and more expensive labor, the report said.

Overall, half of the index's ten components declined in February, including employment plans, expected sales, and credit conditions, the report said. 

Retail Sales Flat

Retail sales rose 0.1 percent to $370.5 billion in February, boosted largely by higher gasoline prices, the Commerce Department reported Tuesday.

Sales declined at furniture, clothing, and electronics stores, among other retailers, while sales rose at gas stations, car dealerships, and grocery stores, the report said.

Overall, retail sales were up 3.2 percent from the same period last year, the report said. 

Producer Prices Up

Prices paid by manufacturers jumped by 1.3 percent in February, following unexpected declines the previous month, the Labor Department reported Thursday.

While prices for finished goods were driven up by a 3.5 percent increase in energy costs, compared to a 4.6 percent drop in January, while prices for crude goods and materials soared by 8.9 percent, the report said.

Excluding volatile food and energy costs, so called core producer prices rose 0.4 percent, the report said.

Jobless Claims Down

New claims for unemployment benefits dropped by 12,000 to 318,000 in the week ending March 10, the Labor Department reported on Thursday.

The advance seasonally adjusted insured unemployment rate for the previous week rose by 0.1 points to 2 percent, or 2.576 million, the report said.

The biggest declines in new claims last week were in Massachusetts, Pennsylvania, and Indiana, while the largest increases were in New York, California, and Michigan, the report said.