- Nariman Behravesh, chief economist at IHS Inc.
US small business confidence fell in September as the number of owners, who expect a decline in profits and sales, tightening in credit conditions and a difficulty to fill job openings, increased. According to the National Federation of Independent Business, Small Business Optimism Index dropped 0.8 point to 95.3, being five points below where it was before the start of the 2007-2009 global financial crisis. The survey indicates weaker job creation as those who participated in the survey said they planned to hire fewer workers and spend less on capital investments. However, more business owners said they believed it was an appropriate time to expand their companies and expected improving conditions in six months.
Despite the current economic weakness in Europe, slowing growth in China and geopolitical tensions, the US economy is going to be immune to the headwinds from elsewhere in the world. Household purchases, which accounts for around 70% of the $16.8 trillion economy, will stir the US through deteriorating global economy and restless financial markets. The combination of more jobs, falling gasoline prices and low borrowing costs will help lift household purchases. Consumer spending have risen an average 2% in the six-year long recovery. Spending growth is expected to increase to 2.7% next year after 2.3% in 2014
© Dukascopy Bank SA