Small Business Optimism Falls

Confidence among U.S. small business owners plunged in October to the lowest level in 28 years as sales slumped to a record low and spending plans were pared, a private survey found.

The National Federation of Independent Business’ optimism index declined 5.4 points to 87.5, the lowest since 1980, the Washington-based group said Tuesday. The sales gauge dropped to the lowest level since records began 35 years ago and hiring plans were the weakest since the 1981-82 contraction.

“Case closed,” William Dunkelberg, the group’s chief economist, said in a statement. “The economy is solidly lodged in recessionary mire.”

Measures of the outlook for revenue and economic growth took the biggest dives, with each falling 14 points. One in four survey respondents said sales were the single-biggest problem, with the net share of owners expecting higher sales falling to minus 16 percent.

The net share of respondents projecting the economy would improve dropped to minus 4 percent.

The survey’s net figures are calculated by subtracting the percent of business owners giving a negative answer from those giving a positive response.

Plans to invest and hire also were trimmed, the NFIB survey showed. The net share of businesses intending to create new jobs during the next three months decreased to zero percent. A jump in the number of respondents planning work force reductions paced the decline.