U.S Small Businesses Profits Show Decline

esulted in the all time low of below 90 in history.

When researched about the reasons for the decline, it can be said that 90% of the decline was due to business owners pessimistic outlook on economic conditions, they feel that economic conditions will be still worse in next six months. They have no confidence in the present economic policies, which were proposed to fix the economy.

The study also shows that, the profits of small businesses were showing a declining trend. Currently it was 33% (1% less than July & 29% less than 2005). Due to the lack of profits the small businesses are postponing or totally stopiing the plans of capital spending and expansion.

Reports regarding profits show that, 18 percent reported profits higher (up two points), but 45 percent reported profits decreasing (down two points), not seasonally adjusted.

Reports regarding compensation suggested that, 8% reported reduction in worker compensation and 12 percent reporting increase. Seasonally adjusted, raising worker compensation was reported by 3% (-2% in February). Compensation was found to have improved faster in previous recovery periods, than the present recovery periods. Labor costs, major factor in affecting inflation pressures are found to be under control.

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