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U.S. small business confidence rises slightly in August

Prices are seen on replica Statues of Liberty figures in a shop window in New York City, November 14, 2011. REUTERS/Mike Segar

WASHINGTON (Reuters) - U.S. small business confidence rose modestly in August, suggesting the economy continued to grow at a steady clip halfway through the third quarter.

The National Federation of Independent Business said on Tuesday its Small Business Optimism Index gained half a point to 95.9 last month.

The NFIB said the survey of 656 businesses had not been impacted much by the recent turmoil in global financial markets, which was triggered by concerns over slowing economic growth in China.

"Most of the interviews were completed before the big slide," the NFIB said in a statement.

Five of the index's 10 components increased last month, while three declined and two were unchanged.

The survey's labor market gauges improved further last month, supporting the view that August's job growth slowdown was an aberration. The U.S. Labor Department reported on Friday that non-farm payrolls increased 173,000 last month, the smallest gain in five months.

Small business owners were slightly optimistic about sales, but did not believe it was a good time to expand. Owners were pessimistic about business conditions over the next six months and were noncommittal regarding capital and inventory investment.

The survey pointed to benign inflation pressures in the near term. Fourteen percent of small business owners reported reducing their average selling prices in the past three months, up one point from July. A net 15 percent planned to raise prices, down 2 points from July.

(Reporting by Lucia Mutikani; Editing by Paul Simao)