The nation's small-business owners continue to struggle with weak earnings and rising costs, prompting many to cut spending plans for the months ahead. Here's a look at this week's economic developments and how they may affect your business.

Optimism Falls

Weaker earnings and spending plans kept small-business optimism at record lows last month, the National Federation of Independent Business reported Tuesday.

At the same time, more owners were reporting higher selling prices, with a majority citing inflation as a top business concern, the Washington-based lobby group said.

Overall, the group's monthly small-business optimism index fell for the third straight month in July, dropping by one point to 88.2 and marking the longest stretch of recession-level readings since the index was launched over 25 years ago.

"The inflation problem is getting worse, not better," William Dunkelberg, the group's chief economist, said in a statement.

The index is based on survey responses from more than 1,800 small-business owners nationwide.

Retail Sales Dip

Despite gains from higher gas prices, retail sales fell by 0.1 percent in July on weaker auto sales, the Commerce Department reported Wednesday.

Excluding cars, which dropped by 2.4 percent, overall sales rose by 0.4 percent, driven by a 0.8 percent increase in gas sales, the report said. Stripped of both cars and gas, sales rose by 0.3 percent.

Jobless Claims Ease
Following steady increases in recent week, the number of new claims for unemployment benefits fell by 10,000 last week to 450,000, the Labor Department reported Thursday.

Seasonally adjusted, the insured unemployment rate the previous week rose by 0.1 points to 2.6 percent, reflecting about 3.417 million people filing jobless claims.

The sharpest declines in new claims last week were in Ohio, Kentucky, and North Carolina, while increases were reported in Puerto Rico, Illinois, and Missouri.