NFIB Weekly NewsLeading the News U.S., Canada, Mexico Sign New USMCA Trade Agreement. (12/04/2018)
The Wall Street Journal (11/30, Schlesinger, Davis, Subscription Publication) reported that the U.S., Canada and Mexico have signed a new trade deal to replace the NAFTA.
The leaders of the three countries “signed an authorization for the deal on Friday morning in Buenos Aires on the sidelines of the Group of 20 summit, with their ministers signing it shortly after,” Bloomberg News (11/30) reported. “The vast majority of the pact still needs to be ratified by lawmakers in the three countries but the signing enacts a handful of immediate protections, such as from auto tariffs.” Bloomberg News reported that uncertainties “remain, as the original 1994 pact remains in effect, and tariffs on steel and aluminum continue to be a major irritant.”
Congress Looks To Pass Bipartisan Tax Bill Next Month. (11/27/2018)
The Wall Street Journal (11/23, Rubin, Subscription Publication) reported US lawmakers are seeking to pass bipartisan tax legislation after Congress reconvenes after Thanksgiving, a bill which would be a component of government spending legislation for December. The tax bill would deal with a variety of matters, including expired tax decreases and small changes to the IRS, but with Democrats set to take control of the House majority, Congress will not lengthen individual tax cuts which resulted from the 2017 Tax Cuts and Jobs Act, which are set to expire in 2025, and will not implement another 10 percent tax decrease for the middle class, which was previously alluded to by President Trump.
Kudlow Says Next Phase Of Tax Reform Will Not Happen During Lame-Duck Session. Reuters (11/20, Stone, Lambert) reported that NEC Director Kudlow “told reporters on Tuesday the next phase of US tax reform will not happen during the final months of 2018, the ‘lame duck’ period when Republicans will still control Congress. ... Many changes were being considered ‘to make the code more efficient and more pro-growth...flatter rates for everybody, particularly middle class people, get rid of the loopholes,’ Kudlow said to reporters at the White House.” Kudlow continued, “None of this I think will happen [with the current Congress]. ... That doesn’t mean we couldn’t get something in the new session.”
Trump Highlights Report Showing Business Optimism At 45-Year High. (11/20/2018)
Taking to Twitter last week, the President wrote, “Boom: Record high business optimism, need for employees at 45-year high.” The President also posted a Washington Examiner (11/13, Bedard) story that said “the record level of economic optimism among small businesses is continuing, and those firms trying to fill jobs is at a 45-year high, according to a new” NFIB report. NFIB President and CEO Juanita D. Duggan said, “For two years, small business owners have expressed record levels of optimism and are proving to be a driving force in this rapidly growing economy. ... The October optimism index further validates that when small businesses get tax relief and are freed from regulatory shackles, they thrive and the whole economy prospers.” The Examiner added, “this year’s level has floated between 104 and 108 and in October was 107.4.”
NFIB: Tips For Maximizing Small Business Saturday. (11/20/2018)
The National Federation of Independent Business published a list of five ways for small businesses to make the most of Small Business Saturday. NFIB advises factoring the day into one’s marketing and promotions, hiring additional staff, emphasize the benefits of shopping locally, and staying organized so that business runs smoothly.
October SBET Continues Two Year-Long Record Optimism Streak. (11/13/2018)
The Small Business Optimism Index’s (11/13) reading of 107.4 for October indicates that small business optimism has continued a two-year record high streak. NFIB President and CEO Juanita Duggan is quoted saying, “The October optimism index further validates that when small businesses get tax relief and are freed from regulatory shackles, they thrive and the whole economy prospers.” NFIB chief economist Bill Dunkelberg is quoted saying, “October’s report sets the stage for solid economic and employment growth in the fourth quarter, while inflation and interest rates remain historically tame. Small businesses are moving the economy forward.”
Payrolls Continue To Rise, Wages Growing By Most In A Decade. (11/06/2018)
Reuters (10/31, Mutikani) said the ADP national employment report shows that “US private sector payrolls increased by the most in eight months in October.” According to Reuters, “The strong jobs market is gradually putting upward pressure on compensation, with other data on Wednesday showing a solid increase in labor costs in the third quarter.” Reuters added that the Labor Department’s Employment Cost Index report “showed wages and salaries, which account for 70 percent of employment costs, jumped 0.9 percent in the third quarter after climbing 0.5 percent in the prior period.”
Business Climate Gas Prices Drop Below $2 A Gallon In 20 States As National Average Continues To Decline. (12/04/2018)
Bloomberg News (11/28, Collins) reported, “sub-$2 gasoline can now be found in at least one gas station in 20 US states, as the effects of the bear market in crude oil trickle down to motorists.” Meanwhile, “the national average has fallen for seven straight weeks to $2.53 a gallon, the lowest since March.”
House Republicans Struggle To Pass Tax Package. (12/04/2018)
The Washington Post (11/30, Stein) reported House Republicans are struggling to pass a $54 billion tax package while they are still in control, as some “members press to include more significant tax cuts in a package designed to fix errors in their 2017 tax law, among other changes.” If passed, the bill corrects “several drafting errors in the 2017 Republican tax law including a provision that accidentally penalized the restaurant and retail industry,” overhauls the IRS, and “would extend about 30 temporary tax breaks that are set to expire, as well as implement new retirement provisions.”
Fed Officials Say Rate Increase Likely “Fairly Soon.” (12/04/2018)
Reuters (11/29, Schneider, Lange) reported, “Almost all Federal Reserve officials at their last meeting agreed another interest rate increase was ‘likely to be warranted fairly soon,’ but also opened debate on when to pause further hikes and how to relay those plans to the public,” according to minutes of their November meeting. While “an expected December rate increase was further cemented into place,” they “also indicated a potential shift in tone about the future.” Bloomberg News (11/29, Torres) reported that the minutes read in part, “Almost all participants expressed the view that another increase in the target range for the federal funds rate was likely to be warranted fairly soon.”
NYTimes Analysis: “Storm Clouds On The Horizon” For US Economy. (12/04/2018)
Under the headline “For The American Economy, Storm Clouds On The Horizon,” the New York Times (11/28, Appelbaum) referred to “emerging signs of weakness in major economic sectors, including auto manufacturing, agriculture and home building, are prompting some forecasters to warn that one of the longest periods of economic growth in American history may be approaching the end of its run.” The economy “has been a picture of health, expanding at a 3.5 percent annual pace during the third quarter and driving the unemployment rate to 3.7 percent, the lowest level in almost half a century,” but “General Motors’ plans to cut 14,000 jobs and shutter five factories reinforces other recent indications that the better part of the expansion is now in the rearview mirror.”
Puzder: Trump, Not Obama, Is Responsible For Economic Boom. (11/27/2018)
In an op-ed for the Wall Street Journal (11/25, Subscription Publication), Andy Puzder, a former CEO of CKE Restaurants, wrote that despite former President Obama’s claim of responsibility for the current economic boom, the economy did not begin to surge until President Trump took office.
WPost Analysis: Trump Seeks Deficit-Cutting Plan While Calling For New Spending, Tax Cuts. The Washington Post (11/25, Paletta) reported that though President Trump “is demanding top advisers craft a plan” to reduce ongoing budget deficits, he “has flummoxed his own aides by repeatedly seeking new spending while ruling out measures needed to address the country’s unbalanced budget.” Last month, the President “floated a surprise demand to his Cabinet secretaries, asking them to identify steep cuts in their agencies. ... But even as he has demanded deficit reduction, Trump has handcuffed his advisers with limits on what measures could be taken,” and has “suggested that some areas – particularly the military – would be largely spared.” Trump also called for a major middle class tax cut, “a huge package of infrastructure spending and billions of dollars for a wall along the US-Mexico border. He hasn’t specified how he would pay for any of those things.”
Survey: Small Businesses Overlook Chatbots, AI With Tech Investment. (11/27/2018)
PYMNTS (11/21) reported a new study by Capterra has found that small businesses “are overlooking technologies that their customers want or that may improve their operations, including chatbots and artificial intelligence (AI).” Two-thirds of young people say they want to engage with a chatbot with communicating with a brand, though “less than 30 percent of small business leaders across the retail, construction, manufacturing and services sectors are incorporating chatbots.” Additionally, less than one-fifth of the 700 firms surveyed use artificial intelligence “despite a significant portion...acknowledging the importance of AI for their firms and industries.” When investing in AI, small businesses “should target their accounting, file storage, communication and CRM processes,” according to Capterra.
Small Business Marketing Mobile Payments Helping Small Business Owners Reach More Customers. (11/27/2018)
NBC News (11/24) examined how technology is helping small businesses “embrace today’s changing retail world,” discussing how mobile payment apps like Square can help small business owners. One told NBC News, “We used online to tap into the retail space, to make our business different. All of a sudden, we were able to reach customers far beyond our small town instantly.”
SBA Administrator Promotes Small Business Saturday As Holiday Shopping Starts Off Strong. (11/27/2018)
In a Fox News (11/22, McMahon) op-ed, SBA Administrator McMahon declared that “with the holiday shopping season upon us, it’s easy to get swept up in the frenzy over Black Friday and Cyber Monday,” but “for nearly a decade, Small Business Saturday has helped independently owned stores compete with national chains, online retailers and big box stores.” McMahon added this Small Business Saturday “has the potential to be even greater,” as the National Retail Federation “forecasts holiday retail sales will increase between 4.3 and 4.8 percent over last year. Nationwide, shoppers are expected to spend as much as $720 billion.” According to McMahon, “The tax cuts spearheaded by President Trump mean more workers have gotten new jobs, raises, and bonuses – giving them more money to spend.”
Linda McMahon Discusses Small Business Saturday, SBA Resources. (11/20/2018)
Small Business Administration Administrator Linda McMahon appeared on MSNBC (11/18), where she encouraged consumers to support small business owners on Small Business Saturday, November 24. McMahon also highlighted the “full breadth and scope” of the SBA, as well as the resources available through its partnerships with Small Business Development Centers, SCORE chapters, and Women’s Business Centers.
PayPal And Square Quietly Grow Small Business Lending. (11/20/2018)
CNBC (11/16) reported that tech companies such as PayPal and Square have become an increasingly popular financing resource for small business owners who have bad credit or for those who want to cut down on paperwork and access funds more quickly. PayPal and Square both reported significant growth in their loan portfolios in the third quarter. These tech companies have “a few advantages over traditional lenders – they’re able to keep costs low and they have access to transaction data from months or sometimes years of activity. The sales data gives them an alternative to traditional credit scores when deciding whether to lend money.” However, experts and former regulators worried about credit risks and complicated interest rates.
Opinion: 30 Ways To Build A Marketing Presence (11/13/2018)
Writing at Business 2 Community (11/10) James Scherer of Wishpond highlighted some of the marketing techniques he found useful in driving rapid growth. Scherer gave readers 30 separate tactics to work on that he thought would be new to many marketers and “be the most reliable for growing a business.” Among the topics Scherer noted were to; join active communities of other marketers; send micro-influencers an Instagram DM; stand for something; find and repost user-generated content;communicate easily with followers; and run a co-promotion with a business similar to yours, among other topics.
Report: Veteran-Owned Businesses Face U.S. Financing Gap. (11/13/2018)
According to Reuters (11/8, Reuters), a report released by the Federal Reserve Bank of New York and the U.S. Small Business Administration found that veteran-owned businesses, which usually have smaller sales and fewer employees, face greater difficulty than others in accessing credit from lenders. Veterans were more likely in 2017 to say they get less funding than sought, including lower approval rates at popular lenders. Over time, “they have also seen slower relative growth in government-guaranteed loans.” The authors said discrepancies could be explained by three things: vets generally sought smaller loan amounts, had higher credit risk, and lacked information on how to go about it.
Wages and Benefits Administration Proposal Would Allow ACA Subsidies To Be Used For Wider Variety Of Plans. (12/04/2018)
The Washington Post (11/29, Goldstein) reported that the Administration is “urging states to tear down pillars of the Affordable Care Act, demolishing a basic rule that federal insurance subsidies can be used only for people buying health plans in marketplaces created under the law.” The Post said that “federal health officials” advised that states should be “free to redefine the use of those subsidies, which have since 2014 provided the first help the government ever has offered consumers to afford monthly insurance premiums.”
Senators From Both Parties Want To Delay ACA Health Insurance Tax. (12/04/2018)
The Hill (11/30, Weixel) reported that a small group of senators from both parties is “urging leadership to extend a delay of ObamaCare’s health insurance tax before the end of the lame duck session.” The article said this tax “has been criticized by Republicans and some Democrats for driving up premiums.” The tax “has already been suspended for 2019.”
Case Made Against $15 Minimum Wage. (11/27/2018)
In an op-ed for the Wall Street Journal (11/22, Saltsman, Subscription Publication), Michael Saltsman, managing director at the Employment Policies Institute, argued against a $15 federal minimum wage, which Democrats have said is high on their agenda. Saltsman wrote that while Democrats say the federal minimum wage and those who earn it have been stuck, Bureau of Labor Statistics data show the number people earning the minimum has declined annually since 2010.
Former Fidelity President Backs Measure Making It Easier For Small Companies To Offer 401(k)s. (11/27/2018)
Robert C. Pozen, former president of Fidelity Investments, argued in the Wall Street Journal (11/19, Pozen, Subscription Publication) that Congress must make it easier for small companies to offer their employees 401(k)s. Pozen offered his support for the Retirement Enhancement and Savings Act, or RESA, which would allow unrelated employers to sponsor multiple-employer plans and permit qualified financial firms to offer a standard plan to groups of small employers. Pozen called on the Administration to work with Congress to adopt RESA by the end of the year.
Alain Enthoven wrote in a Wall Street Journal (11/22, Subscription Publication) op-ed that some 60 percent of Americans with employer-sponsored coverage receive healthcare through self-insured plans. He argued that this is problematic because these plans lack capped budgets. According to Enthoven, a better option is prepaid group plans which allow employers to pay hospitals pre-determined, fixed amounts.
Mike Roach, co-owner of Paloma Clothing in Portland, OR, and a member of Small Business Majority’s Small Business Council, wrote in an op-ed for The Hill (11/23) that recently, when the Trump Administration finalized new rules which “will allow some employers to opt out of providing their employees with access to birth control coverage, it didn’t just attack women’s rights, it also went against the wishes of most small businesses, which support providing contraceptive coverage in employer-sponsored health plans.” Roach argued that letting employers “opt out of birth control coverage gives them the opportunity to ignore a rule established by the Affordable Care Act (ACA), which states that employer-provided health insurance plans must include access to no copay contraceptives.”
Senator Sanders Introduces “Stop Walmart Act” To Compel Companies To Pay Higher Wages (11/20/2018)
Multiple outlets, including CNBC (11/15, Sloane, Mui), Fox Business (11/15, De Lea), and the Washington Post (11/14, Stein), reported on Sen. Bernie Sanders’ introduction of the ‘Stop Walmart Act.’
Fortune (11/15, Laursen) reported that the bill is designed to “force big companies to pay their lowest-earning workers before shareholders.” The bill “would incentivize corporations to pay a minimum wage of $15 an hour, provide workers seven days of sick leave, and cap CEO compensation at 150 times the median employee pay by barring stock buybacks among firms that fail to meet those criteria.”
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