US NFIB June survey to end the encouraging trend?

The NFIB's small business optimism index tumbled by 4.2 points in June to 94.1, the lowest reading in more than a year

This was an unexpectedly weak report, running contrary to June's performance of consumer confidence and other indicators of economic activity, such as the ISM surveys. The poor showing of the NFIB survey in June has brought to an end to an encouraging trend, offsetting all of the gains in the index seen in the previous two months.  

Sales and  earnings appears to be particular area of concern for small business owners. It is hard to blame businesses for feeling somewhat downbeat about the sales given the weak start of the year, and uneven performance of retail sales in the second quarter. 

Excluding sales of autos and parts, retail sales were down in two out of three months of the second quarter of 2015. Still, with the labor market showing steady improvement and gasoline prices still low, stronger consumer spending on goods and services should show up in the second half of the year.

"Increased stock market volatility in June and elevated global risks stemming from Greece and China may also have contributed to the souring in business sentiment. As these issues fade and attention returns to domestic fundamentals, small business optimism is likely to rebound", states Economics TD.