LIVE MARKETS-Fear factor: Small business owners turn pessimistic, consumers pay down their plastic

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FEAR FACTOR: SMALL BUSINESS OWNERS TURN PESSIMISTIC, CONSUMERS PAY DOWN THEIR PLASTIC

"The word of the day, the week, the month, and the year is clearly 'uncertainty,'" or so Ryan Detrick, chief market strategist at the Carson Group, told Reuters amid Monday's whipsaw session.

And uncertainty has been increasingly haunting U.S. economic indicators.

The mood among small business owners in the U.S. grew dimmer last month, according to the National Federation of Independent Business (NFIB).

NFIB's Optimism index USOPIN=ECI lost 3.3 points, landing at 97.4, its sourest reading since October, and dipping below its 51-year average of 98 for the first time since the presidential election.

Digging deeper, while the uncertainty index pulled back from February's second-highest reading ever, the percentage of respondents expecting improved business conditions plunged 16 points, and while those who expect to hike prices increased to 30%.

Poor labor quality was deemed the "most important problem," followed by taxes and inflation.

"The implementation of new policy priorities has heightened the level of uncertainty among small business owners over the past few months," writes Bill Dunkelberg, NFIB's chief economist. "Small business owners have scaled back expectations on sales growth as they better understand how these rearrangements might impact them."

It should be noted that NFIB is a politically active membership organization, whose PAC skews heavily Republican, according to the Center for Responsive Politics/opensecrets.org.

Separately, on late Monday a report from the Federal Reserve showed the U.S. consumer credit balances USCRED=ECI unexpectedly decreased last month.

Data from the Federal Reserve showed the total outstanding credit balance fell by $810 million in March, in defiance of the $15 billion increase analysts expected.

What's more, February's growth was downwardly revised, slashed to $8.90 billion from $18.08 billion.

Looking closer, non-revolving credit - which includes big-ticket items like cars and tuition - fell by $938 million, as policy uncertainties likely put the brakes on major household spending decisions.

Non-revolving credit, which includes credit card balances, increased by $128 million, marking a steep deceleration from the prior month's $6.55 billion increase.

The chart below shows plunging consumer expectations happening at a time when the saving rate is increasing and credit card balances are being paid down for the first time in nearly four years.

It paints a portrait of Detrick's word of the day.

(Stephen Culp)

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