NFIB Weekly NewsLeading the News Small Business Optimism Index Continues Historic Positive Trend In September. (10/09/2018)
The NFIB Small Business Optimism Index for Septmber was the third-highest in the survey’s 45-year history, continuing a historic 23-month positive trend. NFIB President and CEO Juanita Duggan said the index is “evidence that tax cuts and regulatory rollbacks are paying off for the economy as a whole. ... Our members say that business is booming and prospects continue to look bright.” NFIB Chief Economist Bill Dunkelberg said, “With profits and investment remaining strong, our hope is that policymakers will stay the course and not screw around with success.”
US House Of Representatives Passes Bill Making Tax Cuts Permanent. (10/02/2018)
The AP (9/28, Gordon) reported that Republicans “have sped legislation through the House to expand their massive new tax law” by approving a bill that “would make permanent the individual and small-business tax cuts in the law.” The AP reported House Democrats “continued their solid opposition to tax-cut legislation, asserting it favors corporations and wealthy individuals over middle-income Americans,” even as “several Republican House members, facing tough re-election fights in the high-tax, Democratic-leaning states of New York and New Jersey, voted against their party’s bill.”
Stock Markets Reach Records, Jobless Claims At 49-Year Low. (09/25/2018)
“The bulls have regained control on the American equity market,” Bloomberg News (9/21, Popina) reported last Friday, as “the S&P 500 Index capped a second weekly advance, ending the five days less than two points away from its all-time high” while “the S&P 500 rose 0.9 percent to 2,929.67 in the five days through Friday,” and “the Dow Jones Industrial Average advanced 589 points to 26,743.50, ending at an all-time high.” According to Bloomberg News, the DJIA “was the last of the major indexes to reclaim records set in January.”
President Hailed Record-Breaking Small Business Optimism. (09/18/2018)
Tuesday morning of last week, President Trump tweeted about the strength of small business optimism with Business Insider (9/11, Bryan) reporting that NFIB’s small business optimism index hit a record 108.8 for August. NFIB President and CEO, Jaunita Duggan, told Business Insider that “A lot of times when the optimism index has gotten up around this type of record, it’s based on expectations like is it a good time to expand, expected sales, and that sort of thing. ...The index is dominated in this case by business activity that actually grows GDP: job creation plans, job openings, capital spending plans, and earnings.”
NFIB Optimism Index Sets New Record. (09/11/2018)
The NFIB Small Business Optimism Index for August reached 108.8, a new record in the survey’s history. The survey showed new records in job creation plans and unfilled job openings, as well as the percentage of small business owners who believe now is a good time to expand. NFIB President and CEO Juanita Duggan is quoted saying, “Today’s groundbreaking numbers are demonstrative of what I’m hearing everyday from small business owners – that business is booming. As the tax and regulatory landscape changed, so did small business expectations and plans. ... We’re now seeing the tangible results of those plans as small businesses report historically high, some record breaking, levels of increased sales, investment, earnings, and hiring.”
Trump: American Workers “The Cornerstone Of Greatness.” (09/04/2018)
The Washington Times (9/2, Harper) reports President Trump released “a rousing proclamation for Labor Day that reveals his admiration for the nation’s workforce,” noting the statement has nine paragraphs and “includes some strategic references to Mr. Trump’s productive labor policies.” Wrote the President, “On Labor Day, we celebrate the American worker: the bulwark of our national prosperity and the cornerstone of our national greatness. Since taking office, my administration has sought to restore the obligation of loyalty and allegiance that this nation’s government owes to its workers.” The article summarized key points of the proclamation, in which Trump stated “The dedication, resolve, and pride of the American worker built the greatest country in the history of the world — the envy of nations and the pride of countless millions — and now, we are bringing to life the next great chapter in the history of this magnificent Republic.”
Business Climate Federal Reserve Chairman Hails Economy’s Strength, Says Tax Cuts Played Role In Boosting Growth. (10/09/2018)
The AP (10/2, Crutsinger, Leblanc) reported Federal Reserve Chairman Jerome Powell said yesterday that “the combination of steady, low inflation and very low unemployment shows the country is going through ‘extraordinary times.’” The AP reported Powell “noted in his speech that the unemployment rate stands near a 20-year low of 3.9 percent, while inflation has risen close to the Fed’s 2 percent target for annual increases in inflation.” Powell acknowledged that the current data “runs counter to an economic theory known as the ‘Phillips curve,’ which argues that low unemployment forces employers to push up wages to compete for scarce workers, triggering more inflation.”
Unemployment Rate Falls To 3.7%, Lowest Rate Since 1969. (10/09/2018)
The New York Times (10/5, Casselman) reported that the Labor Department on Friday announced that 134,000 jobs were added last month, moving the unemployment rate down to 3.7 percent, “the lowest since 1969.” In addition, “average earnings rose 8 cents an hour and are up 2.8 percent over the past year.” The Times states that “by nearly any measure, today’s labor market is the strongest since the dot-com boom of the late 1990s and early 2000s. Job growth has repeatedly defied economists’ predictions of a slowdown.” The Times added, “African-Americans, Latinos and members of other groups that often face discrimination are experiencing some of their lowest rates of joblessness on record.”
Dollar, Treasury Yields Rise On Economic Data. (10/09/2018)
Reuters (10/4, Cole) reported, “As stunningly strong US economic data drove Treasury yields to their highest since mid-2011,” rising “12 basis points to 3.19 percent, the highest since June 2011.” This “groundswell of economic optimism swept the US dollar to a six-week high on a basket of currencies and it was last trading at 95.762.” The Wall Street Journal (10/3, Otani, Subscription Publication) said the economic data show the US economy defying forecast stagnation.
Federal Reserve Touts Strong Economy, Signals Intent To Continue Raising Rates Into 2020. (10/02/2018)
The AP (9/26, Crutsinger) reported that the Federal Reserve “signaled its confidence Wednesday in the US economy by raising a key interest rate for a third time this year, forecasting another rate hike before year’s end and predicting that it will continue to tighten credit into 2020 to manage growth and inflation.” In a statement “after its latest policy meeting, the Fed dropped phrasing it had long used that characterized its policy as ‘accommodative’ – that is, favoring low rates.” According to the AP, the Fed “had used variations of that pledge in the seven years that it kept its key rate at a record low near zero and over the past nearly three years in which it’s gradually tightened credit.”
In an interview with The Hill (9/28, Manchester), Treasury Secretary Mnuchin said the Administration “couldn’t be more optimistic about economic growth over the next few years,” driven in part by the 2017 tax cuts “fundamentally changing the worldwide tax system so that we’re competitive.”
In another article, The Hill (9/28, Manchester) reported Mnuchin also predicted there will “be over $100 billion dollars in private capital that will be invested in opportunity zones” created by the 2017 tax law. Mnuchin added the investment “will unlock lots of capital that was tied up that never would have been sold to reinvest in these communities.”
Canada Agrees To Join Trade Accord With US And Mexico. (10/02/2018)
The New York Times (9/30, Rappeport) reported that the US and Canada have reached “a last minute deal to salvage the North American Free Trade Agreement, according to people familiar with the negotiations, overcoming deep divisions to keep the 25-year-old trilateral pact intact.” The deal came after “a weekend of frantic talks to try and preserve” the trade pact, which “was in danger of collapsing amid deep divisions between President Trump and Canadian Prime Minister Justin Trudeau.”
Small Business Marketing Microbrands, Marketing Propels Online Sales, Boosting Supporting Companies. (10/09/2018)
The Wall Street Journal (10/4, Mims, Subscription Publication) reported that there is an explosion of microbrands popping up across the Internet, and their boom is propelling supporting companies like Amazon Prime, Shopify, Lumi, and UPS. These brands outsource more material than their predecessors, relying on cheap goods overseas to propel their profits in the online space.
Salesforce Acquires Interactive Email Service Startup Rebel. (10/09/2018)
Salesforce is acquiring a startup named Rebel that makes interactive email services, and media reports are positioning the move as an expansion of its Marketing and Commerce Cloud and another step in an escalating competition with Adobe. Axios (10/6, Fernandez) reported Rebel’s services will be integrated into Salesforce, but it’s not yet clear if Rebel will continue to provide its services to its current partners, including Oracle and IBM. Deal terms were not disclosed.
Amazon Launches “Storefronts” To Promote Products From Small, Medium US Businesses. (10/02/2018)
The Motley Fool (9/27) reported Amazon “has launched Amazon Storefronts, a new ‘store’ that exclusively sells products from small and medium-sized businesses from the United States.” Amazon Storefronts currently “offers more than 1 million products curated by Amazon from 20,000 small and mid-sized businesses” from each of the 50 states. The selection at launch includes “products in categories including back to school, Halloween, home, kitchen, pet supplies, and books.” Additionally, Amazon “plans to support Storefronts with its first-ever national advertising campaign.”
Amazon Launches Storefronts For Small Businesses. (09/25/2018)
Forbes (9/23, Marks) reported that Amazon has “launched Amazon Storefronts – a new section of its site that only lists products sold by U.S. small- and medium-sized businesses.” Amazon “says it’s a way for shoppers to find smaller merchants more easily and has chosen more than one million products from about 20,000 businesses to be featured on the site, based on customer ratings.”
Adobe’s Deal For Marketo Sets Up Race With Salesforce For Tech Stack. (09/25/2018)
Ad Age (9/21, Slefo) reported “Adobe has fired a shot across several bows” with the deal to pay $4.75 billion to buy Marketo, “which will help it compete in marketing services against Microsoft, Oracle, SAP and even the great powers of digital advertising, Google and Facebook.” The biggest message, however, likely was meant for Salesforce. Ad Age said Adobe and Salesforce are both “racing to offer marketers one-stop, cloud-based services that make sense of voluminous data and automatically take action whenever consumers or clients engage though channels such as search, social media, email and video.” Ad Age described steps in the competition, quoting John Koetsier, VP of Insights at the marketing intelligence provider Singular, who said Marketo often takes clients from Salesforce’s Pardot. He added, “Some marketers even view Pardot as a kind of stepping stone to Marketo. ... Now, Adobe owns the ‘grown up’ product to Salesforce’s beginner solution.” Marketo also gives Adobe what Ad Age calls “another massive dataset to help it compete with Facebook, Google and others.”
Report Shows How Brands Use Amazon’s Ad Options Successfully. (09/18/2018)
Retail Dive (9/13) said that according to Gartner L2’s “Amazon Winner’s Circle” report, Levi Strauss & Co. has found success with sales and advertising on Amazon. Levi “funneled ad spend away from YouTube and directed ad referrals to its branded Amazon page,” increasing its share of Amazon ad impressions from three to 30 percent. This web traffic boost increased the store’s organic visibility in Google search results, driving “more consumers to an Amazon page with Levi’s merchandise and away from traditional Amazon search pages where competitors also run ads.” Gartner L2’s report “should help shed some light on how different brands are using Amazon’s various ad options successfully.”
Wages and Benefits Study Finds Insurers Returning To Pre-Obamacare Levels Of Profitability. (10/09/2018)
The Hill (10/5, Hellmann) reported on a brief from the Kaiser Family Foundation released Friday found “insurers in the individual market performed better financially in the first six months of 2018 than they have in all of the years of the Affordable Care Act.” The Hill added the brief “shows insurers returning to the levels of profitability seen before the passage of the ACA, but notes recent actions from the Trump administration ‘cloud expectations for the future.’”
Consumers Urged To Beware The False Sense Of Security Provided By Short-Term Health Plans. (10/09/2018)
On its website, CNBC (10/7, Cornfield) reported that although everyone is not an ACA supporter, comparing “the typical health insurance plan regulated by the Affordable Care Act with a cheaper short-term health plan...might just change” their minds. The article said, “Short-term health insurance is a stripped-down health care plan that doesn’t fall under ACA regulations.” They are not required “to cover specific services, such as prescription medication or maternity benefits, and they are of limited duration: just three months.” An expert with first-hand knowledge of short-term plans says they provide a false sense of security, but consumers “have to read the fine print really carefully.”
Small Business Owners Consider The Cost Of Health Care Their Biggest Issue, Survey Finds. (10/02/2018)
The Hill (9/26, Elis) reported that small businesses say “the most important issue affecting them is the cost of health care, according to the National Small Business Association’s annual Politics of Small Business Survey.” Data show 40 percent of respondents said the cost of health care is the one issue they discuss the most with elected officials.
Democrat Gubernatorial Candidates Make Medicaid Expansion A Central Campaign Issue. (10/02/2018)
The Hill (9/29, Weixel) reported Democratic candidates for governor in states including Wisconsin, Georgia, and Florida “are seizing on the popularity of Medicaid, making it a central part of their campaigns and using it to attack their GOP opponents.” Following the GOP’s failure to repeal Obamacare last year, “advocates see momentum on Medicaid in state capitals” and see it as a key “to breaking through GOP gridlock, and making expansion a reality in states that have so far refused to do so.”
In Reversal From Past, Democratic Candidates Openly Embracing ACA. (09/25/2018)
Bloomberg News (9/20, Sullivan) wrote that while Democrats “used to run away from President Obama’s signature health care law,” this year, defending the Affordable Care Act “from Republican attempts to overturn it is central to the party’s efforts to take back Congress.” Democratic candidates are campaigning on shoring up the ACA, “not just in reliably blue states, but in traditionally Republican strongholds. Though they might not use the word ‘Obamacare’ itself, Democrats warn against GOP legislation and lawsuits that seek repeal or would block the law’s most popular elements.”
Unions Find Leverage To Strike In Low Unemployment, Tight Labor Market. (09/25/2018)
The Wall Street Journal (9/23, Maher, Morath, Subscription Publication) reported that with unemployment low and the labor market tight, organized labor is gaining confidence, feeling it has the leverage to force concessions. Over the past few weeks, there have been strikes by hotel housekeepers in Chicago, distillery workers in Kentucky, and crane operators in Seattle, and Los Angeles teachers are threatening to walk out. In addition, US Steel and ArcelorMittal union members have also authorized a strike if talks break down.
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