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US small-business optimism falls more than expected in August

Optimism among U.S. small business owners declined more than expected in August amid recession fears, survey results from the National Federation of Independent Business showed.

The small-business optimism index slipped to 103.1 in August from 104.7 in July, lower than the Econoday consensus estimate of a reading of 103.5.

The Uncertainty Index climbed four points in August.

"[T]he manic predictions of recession are having a psychological effect and creating uncertainty for small business owners throughout the country," said Juanita Duggan, the federation's CEO. However, small businesses continue to invest and grow despite a gloomy outlook, she said.

A net 59% of owners reported capital spending in the month, up 2 percentage points on July, and 28% plan to make capital outlays in the next few months. Six percent of owners reported an increase in nominal sales while 17% expect higher real sales in the coming months, down from 22% in July.

Just 26% of owners said now is a good time to expand, unchanged from the prior month.

Employment growth picked up in August, but the net percent of businesses planning to add further jobs fell 1 point to 20% compared to July.

A net 12% of businesses anticipate the economy will improve, down 8 points against the previous survey.