US small business optimism falls to two-year low amid economic uncertainty

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U.S. small business optimism in January fell to the lowest level in more than two years amid uncertainty about future economic growth, the National Federation of Independent Business (NFIB) said Tuesday.

The index of small business optimism slipped 3.2 points to 101.2 last month, the lowest since November 2016, the NFIB said, adding small business owners expressed concerns about future sales growth and business conditions later in the year.

While the index remained well above the historical average of 98, it indicated uncertainty among small business owners due to the 35-day partial government shutdown and financial market instability, according to the NFIB.

"The return to divided government in Washington created an inability to agree on basic policy measures," NFIB chief economist Bill Dunkelberg said in a statement.

"This produced the longest partial government shutdown in history, elevating the level of uncertainty, which is damaging to economic activity," he said.

The 35-day partial government shutdown ended in late January when the White House and congressional lawmakers agreed to fund the government for three weeks to allow for negotiations over border security.

House and Senate bipartisan negotiators said Monday night that they have reached "an agreement in principle" on spending and border security in a bid to avoid another government shutdown. The temporary government funding bill runs out Friday midnight.

More than one-third of small business owners had been affected by the recent partial government shutdown, according to the CNBC/SurveyMonkey's small business survey released Monday.

About 35 percent of small business owners nationwide said they experienced a "sales slowdown" attributable to the lack of demand from nearby federal workers. Another 13 percent reported the "direct loss of revenue from a contract with a government agency," the survey showed. 

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