NFIB Weekly NewsLeading the News Consumer Sentiment Soars To Highest Level In 15 Years (05/21/2019)
The Wall Street Journal (5/17, Nunn, Subscription Publication) reported the University of Michigan said Friday that its index of consumer sentiment at the start of May rose to 102.4, up from 97.2 in May. The Journal said this exceeded economist expectations of 97.0 and was the highest level since 2004. However, Reuters (5/17, Mutikani) said “much of the surge was recorded before an escalation in the trade war between the United States and China, which could hurt activity.”
Small Business Optimism Shows Steady Increase In April (05/14/2019)
The NFIB Small Business Optimism Index (5/13) evinced a steady increase in optimism among small business owners in April, climbing 1.7 points to 103.5. Sales improved, as did business conditions, and credit expectations, while job creation and hiring stayed strong. NFIB President and CEO Juanita Duggan was quoted saying, “America’s small and independent businesses are rebounding from the first quarter ‘shut down, slow down’ and don’t appear to be looking back. April’s Index is further evidence that when certainty and stability increase, so do optimism and action. ... The continued economic boom is thanks, in a major way, to strong growth in the small business half of the economy.”
Trump: “Looking Hard” Into $1T-$2T Bipartisan Infrastructure Plan. (05/07/2019)
The Hill (5/4, Axelrod) reported President Trump on Saturday tweeted, “There is nothing easy about a USA Infrastructure Plan, especially when our great Country has spent an astounding 7 trillion dollars in the Middle East over the last 19 years, but I am looking hard at a bipartisan plan of 1 to 2 trillion dollars. Badly needed!” The Hill noted that his tweet comes “days after Democratic congressional leaders said they reached an agreement with the president to seek a deal on a $2 trillion infrastructure bill.”
Opinion: NFIB Jobs Report Shows Continued Hiring, More Employee Training. (05/07/2019)
In a Best of the Web piece for the Wall Street Journal (5/2, Subscription Publication) James Freeman wrote that small firms continued to hire workers and raise wages through April, according to the NFIB Small Business Jobs Report. Freeman noted that small businesses added a net 0.32 employees for April, which he said was a healthy pace. Freeman added the NFIB report indicated continued strong demand for both skilled and unskilled labor, with employers investing more time in employee training.
U.S. GDP Grew 3.2 Percent In Early 2019. (04/30/2019)
The Washington Post (4/26, Long) reported that the Commerce Department on Friday reported “the U.S. economy expanded at a strong 3.2 percent annualized rate from January through March...blowing past expectations and causing elation among President Trump and his advisers, even though some economists warn that growth was high because of companies’ beefing up their inventories and a smaller trade deficit, factors unlikely to persist.”
Big Business Starting To Embrace Higher Minimum Wage. (04/23/2019)
CNN (4/17, Depillis) reported, “Last month, McDonalds — the most recognizable name in America’s lowest-paying industry — announced it would no longer lobby against minimum wage hikes. A few months before that, Amazon proclaimed that it would fully meet activists’ demands for a $15-per-hour baseline and that it would throw its considerable lobbying weight behind an increase in the federal floor. Then, just last week, Bank of America outdid them both, setting its own minimum at $20.” CNN quotes Jon Kurrle, vice president of federal government relations at the NFIB saying, “We’re playing defense on this one, to state the obvious. A larger company can absorb costs in a way that a smaller business can’t, and also make technology investments in a way that not all small businesses can.”
Business Climate Freeland Says Canada Moving “Full Speed Ahead” On Ratification Of USMCA (05/21/2019)
Reuters (5/18, Scherer) reported Canadian Foreign Minister Chrystia Freeland on Saturday said that after the US lifted steel and aluminum tariffs, her government is moving “full steam ahead” toward ratification of the US-Mexico-Canada Agreement (USMCA). In an interview with CBC radio, Freeland stated, “We were very clear that as long as the 232 tariffs were there it would be very, very hard for us to ratify the new NAFTA, and that is why we did not table the legislation.” However, Reuters added she did not reveal “when the agreement would be presented to parliament, which closes down in June ahead of an October national election.”
Fed’s Kashkari Argues For Allowing Inflation To “Climb Modestly” Above Two Percent (05/21/2019)
Reuters (5/16) reported that “low US inflation expectations are sapping the Federal Reserve’s ability to respond to a future downturn, Minneapolis Fed President Neel Kashkari said Thursday, calling for the Fed to allow inflation to rise above 2% to bring the economy back to full strength.” Said Kashkari, “In my view, we have not implemented our current framework as it was designed to be implemented. ... For our current framework to be effective and credible, we must walk the walk and actually allow inflation to climb modestly above two percent in order to demonstrate that we are serious about symmetry.”
CBO: Trump’s Proposed Budget Would Hike Deficit Far More Than White House Indicated (05/14/2019)
The AP (5/9, Taylor) reported, “President Donald Trump’s budget plan would produce significantly larger budget deficits than promised when it was released in March, mostly because its estimates of economic growth are too rosy, according to a new nonpartisan analysis Thursday.” CBO’s “estimate said Trump’s budget, if enacted in its entirety, would produce deficits that would be $2.7 trillion greater over the coming decade than promised by the White House budget office.” The AP added that “the difference comes because Trump’s budget predicts economic growth averaging 2.9% over the coming decade while CBO estimates growth averaging 1.8% over that timeframe.”
Tax Reform, Less Regulation Boosting Budgets Of Most States (05/14/2019)
The Wall Street Journal (5/10, Subscription Publication) editorialized that while Democrats assert that the budgets of Democratic states are being adversely affected by GOP economic policies, most states, including ones with Democratic governors, saw more tax revenue due to increasingly better economic conditions that are attributable to tax reform and less regulation.
CPl Rises 2%, Suggesting Inflation Is Subdued (05/14/2019)
The AP (5/10) reported the Labor Department announced Friday that the consumer price index rose two percent in the year ending in April, with prices increasing 0.3 percent in April, “led by more expensive gasoline, apartment rents and appliances.” The AP said, “The figures suggest inflation is mostly subdued, despite solid economic growth and rising wages, which typically push up prices.” Fed policymakers “took note of low inflation at their meeting last week, but Fed Chair Jerome Powell attributed it mostly to ‘transitory’ factors.”
WSJournal Highlights Increasing Federal Tax Revenues (05/14/2019)
In an editorial, the Wall Street Journal (5/12, Subscription Publication) highlighted increasing federal tax revenues as some good news about the federal budget despite an increasing deficit. The Journal wrote that according to the Congressional Budget Office, revenues were up two percent in April, with payroll tax revenue up 4.7 percent due in part to rising employment and wages.
Small Business Marketing Word Of Mouth Plays Increasing Role In Marketing (05/21/2019)
For Hispanic Ad (5/18, Neudecker), Kantar Head of Global Connect Center Niels Neudecker quoted Amazon CEO Jeff Bezos as saying, “The balance of power is shifting toward consumers and away from companies. ... [I]n the old world, you devoted 30 percent of your time to building a great service and 70 percent of your time to shouting about it. In the new world, that inverts.” Nuedecker wrote, “Amazon has changed our world in many ways. For me personally, the countless number of consumer reviews help me to make better purchase decisions daily.” He added, “Building on Bezos’ prediction we believe that Word of Mouth will play an increasingly important role in marketing, especially in situations where consumers are overwhelmed by the number of substitute options and overload of marketing communications.”
American Express Acquires Restaurant Reservations System Resy (05/21/2019)
Bloomberg (5/15, Surane) reported American Express (AmEx) is purchasing restaurant reservations system Resy, which will help the card provider “improve its offerings dining, the top request through its concierge service and a fast-growing category for its card network.” AmEx has been on an acquisition spree since 2017, having “made at least five acquisitions” in that time. AmEx Senior Vice President of Global Loyalty and Benefits Chris Cracchiolo commented: “Loyalty is a lot more than just points. We’re proud to have what we feel is the best points program in the world with membership rewards, but when I think about loyalty I really think about balancing both rational and emotional value.”
Article Suggests Ways Salesforce And ERP Integration Can Help Companies (05/14/2019)
Solutions Review (5/9) reported on the top five ways that Salesforce and ERP integration can help companies become better managed and more efficient. According to the article, Salesforce and ERP integration can help: keep inventory in check; allow consistent updates and changes of data; provide better data availability for everyone; lead to a better and quicker cash flow; and help customers have a better experience.
Small Business Owners Drawn To Online Lenders But Remain Wary Of Exorbitant Interest Rates (05/14/2019)
The Wall Street Journal (5/12, Yerak, Subscription Publication) reported almost one-third of small businesses who applied for credit in 2018 used online lenders, who can approve transactions faster and require less collateral than traditional banks. New digital lenders including Square impose a variety of fees for their services, including taking a percentage of credit card sales or simply charging a flat rate.
National Small Business Week Beginning This Week. (05/07/2019)
The AP (5/1, Rosenberg) reported that National Small Business Week, which will be held from May 5 to May 11, is the SBA event “used...as a showcase for its Small Business Person of the Year awards.” The article added that SBA officials “have long used Small Business Week events to tout the ways their policy has helped companies.”
Small Business Owners To Connect With NASA Contractors At New Orleans Conference. (05/07/2019)
The Baton Rouge (LA) Advocate (5/5) reported in its Business Brief that NASA is hosting a “conference designed to help small businesses earn contracts with NASA and its prime contractors” on June 13 at the University of New Orleans University Center. During the conference, NASA “officials will teach businesses how to secure supplier, subcontractor and service provider contracts with government agencies and large corporate suppliers.” Participants will also “connect one-on-one and earn exclusive access to prime contractors.”
Wages and Benefits Democrats Stuck On How To Raise Minimum Wage Across Country (05/21/2019)
CNN (5/19, Wolf) reported that Congressional Democrats “need more time” to move a $15 minimum wage bill through the House, as a “single minimum wage might not be the thing to bind” so-called “high-cost states and low-cost states.”
WSJournal Survey: Most Economists Expect Wage Gains To Accelerate Next Year (05/14/2019)
In an article titled “Nearly 70% Of Economists Expect Faster Wage Growth Over Next Year,” the Wall Street Journal (5/9, Torry, Subscription Publication) reported on a new survey it conducted in which a majority of economists predicted that low unemployment would cause wages in the US will grow faster next year than this year.
Difficulty Finding Employees Hurting Growth At Smallest US Businesses (05/14/2019)
The Wall Street Journal (5/12, Simon, Subscription Publication) reported job growth at companies with fewer than 20 workers has fallen to the lowest level in nearly eight years as they struggle to both attract and keep employees in the current job market, growing by less than 1% in March and April. According to the article, hiring at these smallest businesses had not been so low since the US was recovering from the financial crisis.
AP Analysis: Administration Offering Mixed Messages On The ACA (05/14/2019)
In an analysis, the AP (5/10, Alonso-Zaldivar) said that the Administration is “arguing in court that the entire Affordable Care Act should be struck down as unconstitutional,” even though “at the same time, Justice Department lawyers recently suggested that federal judges could salvage its anti-fraud provisions, raising questions about keeping other parts as well.” The AP said President Trump offered “more mixed messages” last week when he “floated to a Democratic lawmaker that he’d like to revive her legislation shoring up the health law’s insurance markets.” According to the AP, analyst Timothy Jost said the Administration” may be undercutting its own legal argument that the 9-year-old statute, President Barack Obama’s health care law, is so flawed it must be overturned entirely.”
NYTimes Analysis: Slow Wage Growth Post-Recession Due To Numerous Factors. (05/07/2019)
The New York Times (5/2, Casselman) reported that long-awaited wage growth is “being fueled in part by recent minimum-wage increases in cities and states across the country.” Other factors included a “tightening labor market that is forcing employers to raise pay even for workers at the bottom of the earnings ladder.” However, “not everyone is benefiting equally,” as “African-American workers have seen smaller gains over the course of the recovery.” Economists have puzzled over why “the unemployment rate fell from 10 percent in 2009 to less than 5 percent in 2016” while “wages rose slowly” and are starting to theorize that the “job market wasn’t as good as the unemployment rate made it look.”
WSJournal: ACA Medicaid Expansion Now Hurting States’ Taxpayers. (05/07/2019)
In an editorial, the Wall Street Journal (5/2, Subscription Publication) said the expansion of Medicaid under the Affordable Care Act is now impacting taxpayers in the states that took part, focusing on a plan by Gov. Gina Raimondo (D-RI) to tax businesses that employ low-income workers to cover Rhode Island’s expanding Medicaid rolls.
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