U.S. small business confidence drops in May as inflation fears mount: Reuters

LONDON, June 16 (Xinhua) -- Small business confidence in the United States fell in May on fears of high inflation, news agency Reuters has reported.

The Small Business Optimism Index compiled by the U.S. National Federation of Independent Business (NFIB) dipped 0.1 point to 93.1 last month, and the share of owners expecting better business conditions over the next six months hit a record low, Reuters said on Tuesday.

The U.S. Labor Department reported last Friday that the consumer price index skyrocketed 8.6 percent in May from a year earlier, marking the third straight month of 8-plus percent inflation and hitting a new four-decade high. The figures dashed hopes that inflation had peaked.

In response, the U.S. Federal Reserve on Wednesday raised its benchmark interest rate by 75 basis points, the sharpest rate hike since 1994.

"High inflation has prompted an aggressive response from the U.S. Federal Reserve, leaving investors worrying about a protracted period of very slow growth or even a recession next year," Reuters said.