Owners of small businesses are showing more confidence in the economy, according to Discover Financial Services.

The Riverwoods, Ill., credit card company said its Small Business Watch rose 0.3 points, to 82.1, in July, its second consecutive monthly gain. The index was pegged at 100 when it was created in 2006.

Thirty percent of respondents said they believed the economy was improving, versus 26% in June. Fifty percent said they thought the economy was getting worse, the lowest level since May 2007.

Forty-nine percent said they planned to cut business development spending, down from 51% who said so in June.

While optimism about the economy rose, cash-flow concerns in July reached the highest level in the index's history; 53% of small-business owners said they had encountered cash-flow issues within the previous 90 days that had forced them to postpone paying some bills, up from 42% in June.

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