Optimism at US small business plunges US small businesses grew increasingly anxious about the state of the country's economy in November as concerns about the fiscal cliff took hold. The National Federation of Independent Business's optimism index fell to 87.5, the lowest reading since March 2010, from 93.1 in October, and one of the largest monthly drops since records began in 1986. Economists surveyed by Bloomberg had expected a level of 92.5. Small business owners are less confident that President Barack Obama and congressional Republican leaders will able to avert automatic spending cuts and tax increases set to take effect in January, which has led many companies to curb spending and hiring. Nearly half of owners are now certain that things will be worse next year than they are now. Washington does not have the needs of small business in mind," said Bill Dunkelberg, NFIB chief economist. Between the looming fiscal cliff, the promise of higher healthcare costs and the endless onslaught of new regulations, owners have found themselves in a state of pessimism. We are forced to ask: is this the new normal? The index is based on a monthly survey that asks NFIB members about their plans to increase employment, capital outlays and inventories as well as their expectations that the economy, credit conditions and earnings will improve. While most of the subcomponents of this survey were down a point or two, the "expect better economy" gauge fell to minus 35 from a positive reading of 2 - an unprecedented swing, and its lowest ever reading. At the height of the debate surrounding the US debt ceiling in August 2011, this component fell to minus 26. This is horrific . . . The lagged behind effect of higher gas prices likely played some role, but mostly this is about fiscal cliff fears," said Ian Shepherdson, chief economist at Pantheon Macroeconomics. So far, hiring is holding up, but it won't last. Separately, wholesale inventories and trade deficit data for October displayed the temporary effects of superstorm Sandy that blasted the US northeastern coast at the end of the month. The Commerce Department said wholesale inventories increased 0.6 per cent to a record $497.1bn after a 1.1 per cent gain in September. Economists had forecast stocks of unsold goods at wholesalers to rise 0.4 per cent. While faster inventory growth generally points to a better economic climate as businesses order more goods leading factories to boost their production, the data point to a Sandy-related drop in sales. Sales at wholesalers fell 1.2 per cent after increasing 1.9 per cent the month before. Economists had expected sales to edge 0.1 per cent higher. Auto sales tumbled 3.1 per cent, extending the prior month's 0.8 per cent decline. Separate data showed that the US trade gap widened in October as the biggest drop in exports in almost four years outweighed a drop in imports, pointing to a slowdown in global growth. The trade deficit grew 4.9 per cent to $42.2bn from a revised $40.3bn in September that was smaller than previously estimated, data from the Commerce Department showed. Economists had expected a level of $42.8bn. A wider trade deficit acts as a drag on growth and is usually the result of the US earning less on overseas sales of US-made goods while spending more on foreign products. Exports fell the most since January 2009 and imports posted their biggest decline in eight months. "This is not a surprise when we know that Sandy forced the port of New Jersey to close for the last few days of the month," said Paul Dales, senior US economist at Capital Economics. Other factors are at play too. Exporters are struggling against a weak global backdrop and the previous temporary boost to imports from the release of the iPhone 5 - which is made in China - is now being reversed.