NFIB Weekly News
Leading the News
Small Business Optimism Sees Sharp Fall Due To Coronavirus Concerns
NFIB’s Optimism Index (4/7) fell to 96.4 in March, an 8.1 point decline, and the “largest...in the survey’s history,” on the back of escalating economic disruptions as “nine of the 10 Index components declined.” NFIB Chief Economist William Dunkelberg is quoted saying “Small businesses are living through the coronavirus pandemic right now and it’s hard to say what the severity of the disruption will be, but we do know they’re feeling the urgency.” He added that “It is vital that these businesses have access to federal funds that are made available through the CARES Act to keep the doors open on Main Street.”
WSJournal: NFIB Survey Shows Economy’s Strength Before Coronavirus Business Climate
A Wall Street Journal (4/1, Subscription Publication) editorial says the NFIB’s polling of its members for March found that 54% of the companies said they were hiring and 24% said their biggest problem was finding qualified workers. The NFIB says, the majority of the response arrived before the coronavirus shutdowns began and the goal should be to keep damage from the shutdown from keeping the country to getting back to those March numbers.
President Signs Coronavirus Relief Package Into Law
The AP (3/27, Taylor) reported the President “signed an unprecedented $2.2 trillion economic rescue package into law...after swift and near-unanimous action by Congress this week to support businesses, rush resources to overburdened health care providers and help struggling families during the deepening coronavirus epidemic.” The AP added lawmakers and the Administration acted “with unity and resolve unseen since the 9/11 attacks...to stem an economic free fall caused by widespread restrictions meant to slow the spread of the virus that have shuttered schools, closed businesses and brought American life in many places to a virtual standstill.” Reuters (3/27, Morgan, Cornwell) said, “The rare bipartisan action underscored how seriously Republican and Democratic lawmakers are taking the global pandemic that has killed more than 1,500 Americans and shaken the nation’s medical system.”
However, according to the Washington Post (3/27, A1, Kane, Debonis, Werner), “Tensions between the White House and Congress over how the law will be implemented became immediately apparent,” as the President in his signing statement “wrote that he would not permit a new inspector general to issue certain reports to Congress ‘without presidential supervision.’”
Small Businesses Face Delays In Getting Help From Coronavirus Stimulus Package
The New York Times (3/26, Flitter) reported the coronavirus stimulus package “includes more than $370 billion for small businesses,” adding the bill allows “banks to lend directly to businesses, and those loans will be backed by the Small Business Administration.” However, the SBA website “has been so jammed that many users have been unable to complete loan applications, and those who did are told that they will take at least three weeks to process.” The Times added that additional delays stemming from social distancing among notaries and appraisers “could cripple small-margin operations like restaurants, many of which only have cash to sustain themselves for two weeks, said [NFIB Small Business Legal Center executive director] Karen Harned.”
NFIB: Covid-19 Pandemic Seriously Affecting Small Businesses
Bloomberg (3/23, Jeff Kearns) reported, “More than three-quarters of small businesses in the U.S. have been hurt by the coronavirus outbreak, according to a National Federation of Independent Business survey conducted Friday.” An NFIB statement was quoted saying, “Owners are taking the threat to their business seriously. ... Many owners have already sought out financial help and more are planning to do so in the near future. The outbreak will leave few, if any, owners unscathed. We know the economic impact will be immense.”
Bloomberg Law (3/20, Subscription Publication) reported that “in a virtual town hall hosted by the DOL Wage and Hour Division Friday,” business groups, attorneys, and others “flooded the Labor Department with questions on how the agency plans to implement new coronavirus-related paid family and sick leave requirements.” Bloomberg Law said, “Many participants, including [NFIB] advocates...want the agency to define how a business with under 50 workers will be able to demonstrate that offering leave would jeopardize their business viability.” NFIB legal center executive director Karen Harned was quoted saying, “We’re asking that the department seriously consider all that it can do to make the exemption for those employers with fewer than 50 employees as broad as possible. ... Anything you all can do to make the exemption process as streamlined, easy-to-understand, and as simple as possible would be greatly appreciated.”
Mnuchin: Administration Will Do “Whatever We Need To Do” For Economy
The Washington Times (3/14, Boyer) reported President Trump “and his top advisers acknowledged Saturday that some major employers and even whole sectors of the U.S. economy are shutting down temporarily due to the coronavirus outbreak, and the cost to taxpayers will be enormous.” Treasury Secretary Mnuchin told reporters, “There are parts of the economy that are shutting down or slowing down dramatically.” Mnuchin added, “It would be premature to comment on specific money. I use the analogy of we’re in a baseball game, and we’re in the early innings. We have 100 different things that we’re looking at. Whatever we need to do, we will do.” Mnuchin continued, “We are committed to use all the tools and all the resources of the government to make sure that we protect the economy.”
House Republicans Want Economy To Reopen By End Of April
The Washington Examiner (4/2, Picket) reports House Republicans want the US economy to reopen by the end of April, provided there has been progress in battling the coronavirus pandemic. Rep. Kevin Brady (R-TX), the ranking member on the House Ways and Means Committee, said, “Our focus is on locking down the virus while we’re taking the steps now to prepare to reopen the economy by the end of the month if the virus permits. ... I think we should all expect the jobs, the unemployment in the GDP numbers to feel brutal over the short term. It’s because they are. This economy is taking hits like we’ve not seen in most of our lifetimes. But it is just a short-term hit.”
Fed Economists Warn Unemployment Rate Could Top 32% Small Business Marketing
CNBC (3/30, Cox) reports that as a result of the measures implemented to slow the spread of the coronavirus pandemic, “economists at the Fed’s St. Louis district project total employment reductions of 47 million, which would translate to a 32.1% unemployment rate, according to a recent analysis of how bad things could get.” CNBC adds, “The projections are even worse than St. Louis Fed President James Bullard’s much-publicized estimate of 30%. ... ‘These are very large numbers by historical standards, but this is a rather unique shock that is unlike any other experienced by the U.S. economy in the last 100 years,’ St. Louis Fed economist Miquel Faria-e-Castro wrote in a research paper posted last week.”
Nobel Laureate: Once Pandemic Passes, US Economy Will Return To Prosperity
In an op-ed for the Wall Street Journal (4/5, Subscription Publication), Vernon L. Smith, a professor at Chapman University and the 2002 Nobel Laureate in Economics, highlights some of the positive economic developments during the pandemic, predicting that the US will return to prosperity once the crisis has ended. Smith is confident that innovative companies will find a way to survive, and consumer spending will rebound when Americans go back to work.
Trump Praises Small Business Loans Rollout, Though Some Lenders, Customers Note Delays
Bloomberg (4/4, Mohsin, Jacobs) reported President Trump on Saturday “dismissed concerns about the rollout of a $349 billion program to assist small businesses rocked by the coronavirus, saying loan distributions were “way ahead of schedule” even as banks struggle to respond to the flood of requests.” The President said, “It’s been flawless so far.” He continued, “Far beyond our expectations. I don’t even hear of any glitch.”
IMF Head: Global Economy In Recession Due To Coronavirus, But Could See “Sizeable Rebound” In 2021
The AP (3/27, Crutsinger) reported International Monetary Fund Managing Director Kristalina Georgieva announced Friday that the “global economy has now entered a recession that could be as bad or worse than the 2009 downturn.” However, the agency forecasted a “sizable rebound” in 2021 if nations manage to contain the virus and limit economic damage.
Analysis: Tips On Telecommuting During Coronavirus Outbreak
In an analysis for Bloomberg (3/26) columnist Alex Webb reported that amid the coronavirus outbreak, there is an increase in workers who are telecommuting, and “for all of the telecommunications operators’ assertions that their networks can cope with the peak loads, there are still things you can do to reduce the likelihood of dropped calls or spotty connections,” and “the small changes you make can lessen the load on telecoms networks more broadly.” Webb said, “I carried out a series of tests to see how much data each of the most popular apps required for the same calls, as scientifically as I could given the circumstances. On average, Zoom Video Communications Inc.’s eponymous service and Google Inc.’s Hangouts used more than twice as much data as Apple Inc.’s FaceTime or Cisco Systems Inc.’s Webex.”
Survey: 30% Of Small Businesses Seeking Relief Through SBA Disaster Loans
U.S. News & World Report (4/3, Soergel) reported, “The Chamber’s survey highlights that many U.S. small businesses don’t have much time before needing to make difficult decisions about how – or whether – to keep their lights on.”
Facebook Offers $100M In Aid To Small Businesses Wages and Benefits
In an interview with the Wall Street Journal (4/5, Stoll, Subscription Publication), Facebook COO Sheryl Sandberg discussed the company’s efforts to help small businesses weather the coronavirus downturn. Facebook is launching a $100 million rescue fund, which it hopes will bolster an important source of revenue for the company.
SBA Must Process Ten Times The Loan Amount It Handles Annually In Three Months
Reuters (4/1, Henry, Timmons, Marshall) reports that when it comes to loans for small businesses funded by the emergency spending law, “the application process can be confusing,” and “while the federal government wants to disperse funds quickly, logistical hurdles – including a lack of staff to vet mountains of applications – will be hard to overcome. ... ‘Speed is the operative word,’ Jovita Carranza, administrator of the Small Business Administration (SBA), said in a statement.” However, Reuters says that “for many owners, relief may not come quick enough – their revenues and supplies gutted after many local and state governments ordered business closures in mid-March.” Reuters says the SBA is “sure to be overwhelmed,” and notes that it “issued $28 billion in loans last year,” but “will have to process more than 10 times that amount in just three months with limited staff.”
Amazon, Others Cut Streaming Bit Rates During Pandemic
ZDNet (3/24, Leprince-Ringuet) reported that “the global COVID-19 pandemic is forcing more employees to work from home everyday, and with each of us connecting to our household’s router to carry out record numbers of Zoom calls, the pressure on broadband networks to support unprecedented demand for connectivity is building up.” ZDNet says, “Netflix has agreed to reduce its streaming bit rates across Europe to help keep internet traffic under control during the pandemic, as have Amazon, Apple TV+, Disney+ and Facebook.”
NexTech, Zoom Integrate AI Into Remote Work Platform
The AP (3/24) reports, “NexTech AR Solutions, the leader in augmented reality for eCommerce and AR learning applications, is pleased to announce that it has integrated Zoom into Jolokia’s Inferno platform extending the capabilities of Zoom meetings out to 100,000 people concurrently with real-time Q&A Plus immersive AR creating a one of a kind new platform.” NexTech CEO Evan Gappelberg said, “As of today we can now broadcast a Zoom live conference with enhanced AR to 100,000 people, without any glitching, which is huge.” Amid the coronavirus pandemic, demand for AR tools should increase, as millions of people work from home.
Pandemic’s Stranglehold On Small Business Cashflow Will Test Effectiveness Of Fintechs’ Lending
Payments Source (3/27, Adams) reported payments firms with loan offerings, such as “PayPal, Kabbage and Square,” will “soon find out” if the US government’s coronavirus stimulus package is “enough to save the market.” Such aid packages are “designed to keep businesses whole during weeks of inactivity, attempting to create short-term sustainability to resume those payment flows over the long term.”
Pelosi Pushing For More Small Business, Individual Relief In Next Coronavirus Legislation
Reuters (4/3, Cornwell) reports House Speaker Nancy Pelosi “said Friday that $350 billion in already-passed coronavirus legislation was not enough for small businesses, and she wants more money in next bill being developed now in the Democratic-run House.” Pelosi said in a CNBC interview, “I don’t think the 350 is enough for small business.” Pelosi “also called for ‘another direct payment’ to Americans for coronavirus economic relief, in addition to the $1200 payment already approved for individuals making up to $75,000 a year.” Pelosi “asked Treasury Secretary Steven Mnuchin to ‘please’ electronically transfer the direct payments, not wait and mail them later. Unemployment benefits should be granted for six months, not four months as in the past bill, she said.” The Hill (4/5, Carney) and The AP (4/3, Lemire, Kellman) also report.
More Than 10M Have Applied For Jobless Benefits In Past Two Weeks
The Labor Department announced yesterday that more than 6.6 million Americans applied for unemployment benefits last week. Fox Business (4/2, Henney) reports on its website that the new jobs number “likely reinforces economists’ views that the US has already entered a recession,” and that “analysts are already warning the jobless numbers will likely continue skyrocketing in the coming weeks as mandated social distancing policies remain in place.” The AP (4/2, Rugaber) says the new numbers “double a record high set just one week earlier,” and is “a sign that layoffs are accelerating in the midst of the coronavirus outbreak.” When “combined with last week’s report that 3.3 million people sought unemployment aid two weeks ago, the US economy has now suffered nearly 10 million layoffs in just the past few weeks – far exceeding the figure for any corresponding period on record.” The AP adds “the magnitude of the layoffs has led many economists to envision as many as 20 million lost jobs by the end of April,” which “would be more than double the 8.7 million jobs lost during the Great Recession.”
Administration Scales Back Paid Leave Requirements In Coronavirus Relief Law
The New York Times (4/2, Cochrane, Miller, Tankersley) reports that the Administration “has substantially scaled back paid leave requirements for employers that were created by a new coronavirus relief law, effectively exempting many small businesses in a move that infuriated lawmakers who had fought to expand the benefit.” This week, the Labor Department released a guidance which “said that employers at companies with fewer than 50 workers had broad latitude to decline to offer the 12 weeks of paid leave that the law required for workers whose children were home from school or for child care because of the coronavirus pandemic.” According to the guidance, companies with fewer than 50 employees could refuse to provide paid leave for child care if it would “cause the small business to cease operating,” if the absences would pose “a substantial risk” to the company, or if there were not enough workers “able, willing and qualified” to fill in for the person taking leave.
Analysis Warns Insurance Premiums Could Increase As Much As 40% Next Year Due To Coronavirus Hospitalizations
The New York Times (3/28, Abelson) reported a new analysis by Covered California “says premiums could increase as much as 40 percent next year if the pandemic results in millions of Americans needing hospital stays.” The organization “estimated the total cost to the commercial insurance market,” and found that “depending on how many people need care, insurers, employers and individuals could face anywhere from $34 billion to $251 billion in additional expenses from the testing and treatment of Covid-19.” Hoping to offset such potential costs, “insurers and employers are already prodding Congress to consider helping them pay for the crisis by setting up a special reinsurance program that would cover the most expensive medical claims. The federal government would fund the program to lower the amount being paid by employers and insurers.”
Trump Inks Law Giving Sick Leave To Employees; Major Chains Excluded
QSR Magazine (3/19) reported that President Trump “signed a $100 billion relief package into law Wednesday night, which includes paid emergency leave for many workers.” The package would give “employees up to 14 days of paid sick leave if they are being tested for COVID-19, being treated for it, or have been diagnosed with it,” and also included “paid leave for those helping family members with the virus and for those whose children are home from school,” among other provisions. But the “expanded sick leave portion does not apply to businesses with 500 or more employees such as McDonald’s or Subway.”
Walmart Increases Wages In E-Commerce By $2 Amid Coronavirus-Fueled Demand
Reuters (3/23, Bose) reported Walmart temporarily increased its minimum wage for workers in its e-commerce warehouses by $2. The change will be effective immediately and through May 25. The move echoed rivals Amazon and Target as Walmart “attempts to manage a shopping surge brought about by the coronavirus outbreak.”