U.S. small business confidence in June dove to the lowest level since October 2011 after edging down in a month earlier, signaling the sector felt less upbeat about the economic outlook, a leading industry association reported Tuesday.

The National Federation of Independent Business said that its Small-Business Optimism Index decreased to 91.4 in June from July's 94.4. The decline was significant and relinquished the gains achieved earlier this year.

Meanwhile, eight of 10 index components dropped last month. The index gauging earning trends decreased seven points to a net minus 22 percent, and the share of owners projecting better economy dipped eight points to a net 8 percent. It also implied that most of small business owners had no plan to create jobs and enhance inventory.

This month's survey is a real economic downer, and the economy has definitely slowed, said the association, adding that political uncertainty continues to be a primary cause for a reticence among small-business owners to expand.

The small business industry, accounting for 99 percent of the overall companies, is the major drive of the U.S. economy and holds half of the country's labor force.