Small-business owners’ confidence dropped sharply in August amid increasing gloom about the economy, according to new survey data Discover Financial Services released Monday.

The Discover Small Business Watch declined by 10 points, to 73 from 83 in August, marking the largest one-month decline since November 2009. It was the third consecutive month the Watch showed declining business-owner confidence.

The Business Watch is a monthly report measuring the relative economic confidence of 750 randomly selected small-business owners based on their responses to six questions. Its creators established a base index of 100 when the Watch began in August 2006.

A record 55% of small-business owners in August said they expect economic conditions for their businesses to be unfavorable in the next six months, up from 45% who said so in July. Some 62% of small-business owners this month said they believe the economy is getting worse, up from 57% in July.

Sixty-two percent of small-business owners in August rated the U.S. economy as poor, up from 58% in July, while 28% this month said it was fair, 6% said it was good and 3% rated it as excellent.

Some 53% of owners said they are experiencing cash-flow problems, up from 47% who said so in July, while 43% this month said they are not experiencing cash-flow problems and 4% were unsure.

Seventy-two percent of small businesses surveyed in August said they have no plans to add or subtract jobs, down from 73% said so in July. And the percentage of small-business owners who say they are laying off workers, 20%, is the lowest in the history of the Watch, Discover said.

Only 17% of small-business owners said they plan to increase business-development spending during the next six months, down from 28% who planned to do so in July.

Asked whether the Dodd-Frank Wall Street Reform and Consumer Protection Act President Obama signed into law last month will have a significant impact on their businesses, 48% said no, 30% were unsure, and 22% expect it to have a significant impact. Of those expecting an effect, 79% said it would be negative or very negative.

Survey respondents overall indicated they believe the economy is “stuck in neutral,” Ryan Scully, Discover business card director, said in a statement. “With the economy seemingly unable to show sustained growth, and small businesses not expanding to create jobs, it’s no wonder that confidence is down,” he said.

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