Small-business owners are feeling better about the economy, even as they continue to struggle with cash flow. Here's a look at this week's economic developments and how they may affect your business.

Owner Optimism Rising

Following a 22-month downturn, the mood among the nation's small-business owners picked up in August, Discover reported Monday.

Of 1,000 small-business owners polled nationwide, 23 percent said the economy improved this month, the highest percentage since August 2007, the Riverwoods, Ill.-based credit card firm said.

Only 60 percent said they felt the economy was getting worse, down from 71 percent in July, while 30 percent said business conditions were getting better, up from 28 percent.
Despite the brighter outlook, a growing number continued to report cash-flow issues, the survey found.

"There is still a great amount of caution out there," Ryan Scully, director of Discover's business credit card, said in a statement.

Consumer Outlook Up

Despite ongoing fears over the job market, consumers were feeling better about the direction of the economy in August, the Conference Board reported Wednesday.

In a survey of 5,000 U.S. households, 11.9 percent said business conditions were improving, up from 9.2 percent in July, the New York-based private research group said. Those expecting incomes to increase in the months ahead rose to 14.7 percent from 14.3 percent. 

At the same time, a growing number said jobs were harder to get.

"Overall readings are still quite low by historical standards and it is still too early to tell if the worst is behind us," Lynn Franco, the group's director of consumer research, said in a statement.

Jobless Claims Fall

The number of new claims for unemployment benefits fell by 10,000 last week to 425,000, the Labor Department reported Thursday.

The adjusted insured unemployment rate dropped by 0.1 percentage points the previous week to 2.5 percent, representing 3.423 million people filing claims.

The biggest declines in new claims last week were in California, Illinois, and Ohio, while gains were reported in Florida, Iowa and Missouri.