US small business optimism weakens in June

U.S. small-business confidence slipped in June. Smaller firms overall felt they had too much inventory on hand amid ongoing trade tensions and declining optimism over the outlook for sales. The National Federation of Independent Business said on Tuesday its Small Business Optimism Index fell two tenths of a point last month to 98.6. A substantial increase in respondents reporting excess inventories contributed the most to the decline. Nearly one in eight businesses reported that inventories were “too high” in June, almost double that in May.

The increase in inventory probably indicates to slowing demand in the US economy. Another reason for the increase can be that many businesses imported large amounts of inventory before higher tariffs of President Trump set in.

Higher US tariffs on imported goods will increase costs of purchases for many small businesses in the country. They in turn are likely to pass on the costs to customers in the form of higher prices. But higher prices may reduce demand for their goods among customers and slow down sales.

Japan Eco Watchers Index increases in June but less than expected

A measure of the public assessment of the current situation of the Japanese economy improved less-than-expected in June. The current conditions index of the Economy Watchers’ Survey rose to a 3-month high of 45.0 in June from 44.4 in May. However, any score less than 50 indicates to pessimism. The outlook index that signals future activity also improved to 45.9 from 44.8 in May.

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Source: National Federation of Independent Businesses, United States