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Instability in Washington blamed as small-business confidence remains tepid

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Small-business optimism increased 1.9 points in February, according to the latest report by the National Federation of Independent Business. The number shows an improvement over the last report but is by no means indicative of a surge in confidence among small business owners.

"Washington is manufacturing one crisis after another — the debt ceiling, the fiscal cliff and the sequester," said the NFIB's chief economist, Bill Dunkelberg. "Spreading fear and instability are certainly not a strategy to encourage investment and entrepreneurship."

While Fortune 500 companies may be experiencing record profits, small business earnings remain depressed. Three-quarters of small business owners expect conditions to be the same or worse in six months.


Weak sales are the biggest issue for 18 percent of businesses — with far more owners reporting declining sales than increases — and 43 percent reported lower profits. In the area of credit, 29 percent of owners said they borrow money on a regular basis, and 7 percent said loans are harder to get compared to their last attempt.

"The movement here isn't nearly as positive as what we've seen in the stock market," said NFIB New Jersey director Laurie Ehlbeck. "We're still waiting for the recovery to reach Main Street."

The NFIB's Small Business Economic Trends is a monthly survey of small business owners' plans and opinions. The latest survey is based on the responses of 870 business owners in its membership.

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