The National Federation of Independent Business reported a drop of 0.9 points in its Small Business Optimism Index, a composite of 10 indicators created from its monthly survey of small-business members. The index came in at 103.6 in June, down from 104.5 in May. The index is constructed with 1986 set to 100. June marked the fourth decline in the past five months, after the index hit a 12-year high in January. Even with the recent declines, the index is still about 10 percent above the average reading over the past five years.

Among the 10 indicators that make up the index, the largest decline came in expectations of economic improvement. That indicator fell to a net 33 percent (percent of positive responses minus percent of negative responses) in June, down six points from May. Expectations of higher real sales was the next-largest decliner, falling 5 percentage points to 17 percent in June. Overall, 5 of the 10 indicators declined in June, with 4 improving and 1 holding steady.

Several forward-looking indicators remained at generally high levels, suggesting a positive outlook. Expected sales, planned employment, and planned compensation increases were all at favorable levels. Planned price increases and expected capital expenditures remain somewhat weak, though the capital-expenditures indicator has trended higher over the past several months.

The most important problems facing small businesses are taxes, government regulation and red tape, and quality of labor. The least important issues are inflation, financing, and interest rates. Competition from big business and cost of labor are also among the less important issues facing small business, according to the survey.

The latest Job Openings and Labor Turnover Survey shows the number of job openings fell in May to 5.7 million from 6.0 million in April. Among private sector industries, openings fell to 5.1 million from 5.4 million in the previous month. The openings rate, openings divided by the sum of employment and openings, fell to 3.7 percent from 3.9 percent overall and to 4.0 percent from 4.2 percent for the private sector. Nearly every industry shown separately had a drop in the number of open positions and the openings rate. The highest openings rates were in leisure and hospitality (4.9 percent), professional and business services (4.8 percent), and education and health services (4.5 percent). The lowest openings rates were in mining and logging (1.7 percent), construction (2.2 percent), and manufacturing (2.7 percent).

Not surprisingly, hires jumped in May to 5.5 million while separations hit 5.3 million. Among those separations, quits rose to 3.2 million overall, the highest since 2000. For the private sector, quits increased to 3.0 million, also the highest since 2000. The quits rate, quits divided by employment, rose to 2.2 percent and 2.5 percent for the overall economy and private sector, respectively. Those tie the highest rates since 2007.

Despite slight declines in some of the data today, the levels continue to suggest the economy is growing, the labor market tight, and the outlook favorable.