The nation's small-business owners struggled with weaker sales and tighter credit last month, as their confidence in the U.S. economy sank to record lows, the National Federation of Independent Business reported this week.
More owners cut hiring and capital spending in October to cope with a mix of reduced consumer spending, higher prices and dismal earnings, according to the Washington-based lobby group's monthly small-business optimism index released Tuesday. Nine of 10 index components declined last month, including job openings, sales, and spending plans. All told, the index fell 5.4 points to 87.5, the third lowest reading in 35 years.
"The decline in the index is a clear indication that the economy is solidly lodged in a recessionary mire," William Dunkelberg, the group's chief economist, said in a statement.
Loan demand also declined in October, with fewer owners expecting credit conditions to improve in the months ahead. The report blamed the downturn on the eroding credit worthiness of businesses with lower earnings as a result of the slumping economy.
"The consumer does not appear ready to get into the holiday mood to save the fourth quarter numbers," Dunkelberg said.