NFIB Weekly News
Leading the News
Small Business Optimism Increases Slightly In December
The NFIB Small Business Optimism Index (1/10) increased slightly to a 98.9 reading in December, up 0.5 points from November. Twenty-two percent of small business owners reported inflation as the single most important problem encountered in their business operations. NFIB says price-raising activities has reached levels not seen since the early 1980s. NFIB Chief Economist Bill Dunkelberg was quoted saying, “Small businesses unfortunately saw a disappointing December jobs report, with staffing issues continuing to impact their ability to be fully productive. ... Inflation is at the highest level since the 1980’s and is having an overwhelming impact on owners’ ability to manage their businesses.”
Some Justices On US Supreme Court Express Skepticism About Biden’s COVID-19 Vaccine Mandate Business Climate
The New York Times (1/7, A1, Liptak) reported, “The Supreme Court’s conservative majority seemed to be leaning on Friday toward blocking one of the White House’s main pandemic-fighting strategies, expressing skepticism that the Biden administration has the legal power to mandate that large employers require workers to be vaccinated or to undergo frequent testing.” The Times said, “Chief Justice John G. Roberts Jr. said the states and Congress, rather than a federal agency, were better suited to address the pandemic in the nation’s workplaces. ‘This is something that the federal government has never done before,’ he said, adding that the administration’s several virus-related mandates were ‘a workaround’ in response to congressional inaction.”
Small Business Owners Not Optimistic About Economic Prospects In 2022
Forbes (12/30, Sherman) reported on small business owners’ hopes and concerns going into the new year, highlighting business concerns such as high inflation levels, rising partisanship, supply chain issues, and labor shortages. Forbes also cited NFIB’s November SBET, saying, “Looking at the November 2021 Small Business Economic Trends report from the National Federation of Independent Business, things are also on the glum side. The main number—the groups ‘optimism index’—was 98.4, which sounds good and represents an indexed result that uses 1986 as the base month with an index of 100. ... But other parts of the study were larger indicators of troubled attitudes. About 59% of small businesses raised prices, which is a record. The net number of small businesses expecting to raise prices was another record at 54%.”
NFIB Officials Applaud New CDC COVID-19 Quarantine Recommendations
The Washington Post (12/28, A1, Abutaleb, Sullivan, Rosenberg) reported on the CDC’s new COVID-19 quarantine recommendations, which were “driven largely by the concern that essential services might be hobbled amid one of the worst infection surges of the pandemic, said senior officials familiar with the discussions.” NFIB executive director Holly Wade “also applauded the decision, saying it could help alleviate workforce disruptions affecting many companies.”
Supreme Court To Hear Employer Vaccination Mandate Case January 7
The New York Times (12/22, Liptak) reported the Supreme Court said it will hold a special hearing on January 7 on cases challenging an Occupational Safety and Health Administration vaccine-or-testing mandate for large employers and a Centers for Medicare & Medicaid vaccination requirement for healthcare workers at hospitals that receive federal money. The Times said the court is moving with “exceptional speed” to address the two initiatives, which the Times called “the heart of the Biden administration’s efforts to address the coronavirus in the workplace.” The court’s move may be “a response to mounting criticism of” its shadow docket, “in which the court decides emergency applications, sometimes on matters of great consequence, without full briefing and argument.” At issue in both cases was whether the executive branch is statutorily authorized to issue the requirements, and “there is reason to think that the court’s six-justice conservative majority will be skeptical of broad assertions of executive power.”
Dunkelberg: Small Businesses Contending With Inflation, Supply Chain Issues That Will Take Time To Resolve
NFIB Chief Economist Bill Dunkelberg wrote in Forbes (12/22, Dunkelberg) that “2021...brought us the worst inflation in nearly 40 years, a 7% annual rate. Yet government officials from the President on down have insisted all year that the higher prices are only ‘temporary.’” For this inflation to be temporary, “prices would have to fall by 7%, going back to their pre-inflation levels or at least to 2% which is the Federal Reserve’s goal. That is not likely to happen. ... the damage to your real income is done and not likely to be reversed by falling prices.” Dunkelberg concluded, “The collision of restricted supply and juiced-up demand produces the inflation we are experiencing. Higher prices and profits provide the incentive needed to solve these problems, but it will take some time.”
US To Spend $10B To Help Small Businesses
The Wall Street Journal (1/8, Omeokwe, Subscription Publication) reported that under the State Small Business Credit Initiative, the federal government planned to offer $10 billion to assist small companies get access to capital. The program was meant to spur business in disadvantaged communities and to bolster the country’s economic recovery from the pandemic.
Meanwhile, another article in the Wall Street Journal (1/8, Haddon, Subscription Publication) reported that in a letter to members of Congress, over 3,300 restaurant operators warned their businesses may shut permanently unless lawmakers revive the federal fund created last year to assist the food-service industry. The operators pointed out in their letter that as the pandemic approaches the end of its second year, the restaurant industry is grappling with high costs and fearful customers.
Senators Discussing Another Round Of Stimulus Spending Small Business Marketing
The Washington Post (1/5, Romm) reported that Democratic and Republican senators “have held early discussions about another round of coronavirus stimulus spending as they seek to blunt the fast-spreading omicron variant and its threats to public health and economic recovery.” The Post said “efforts have focused primarily on authorizing billions of dollars to help an array of businesses...that face another potential blow to their already-battered balance sheets as a result of the evolving pandemic.” Talks “have been led by Sens. Ben Cardin (D-Md.) and Roger Wicker (R-Miss.),” who have “cobbled together the outlines of a roughly $68 billion proposal.”
Fed Officials Discussed Raising Rates At A “Faster Pace Than...Earlier Anticipated”
The New York Times (1/5, Smialek) reported that Federal Reserve officials “deliberated the path ahead for interest rates at their December meeting, suggesting that they may need to remove their support for the economy more quickly than they had previously expected at a moment of high inflation and rampant uncertainty.” The Times added that Fed policymakers “projected that they would raise interest rates three times in 2022, the economic estimates they released following their Dec. 14-15 meeting showed,” and “economists and investors think that those increases could begin as soon as March.” According to the Times, “Given their outlooks for growth, the labor market and inflation, the Fed officials noted that ‘it may become warranted to increase the federal funds rate sooner or at a faster pace than participants had earlier anticipated.’”
“Pandemic-Battered Businesses” Lobbying For More Federal Assistance As Omicron Leads To New Surge In COVID-19 Cases
Politico (12/27, Warmbrodt) reported the surge in COVID-19 cases due mainly to the Omicron variant “is forcing pandemic-battered businesses to once again scale back and close their doors, energizing a lobbying push for billions of dollars of new aid for struggling employers and their workers.” The issue “Congress will face when it returns in January is whether the latest Covid-19 wave justifies a new rescue beyond the $1 trillion of emergency small business assistance lawmakers have approved since March 2020. Most of the programs have been tapped out or are winding down.” Politico quoted NFIB vice president of federal government relations Kevin Kuhlman saying, “Everyone’s waiting to see what Omicron does or leads to. ... A month from now may look very different.”
COVID Effects On Restaurants, Businesses Explored
CNN (12/21, Meyersohn) reported on how Omicron is affecting small businesses in New York, saying that owners have noticed a shift in consumer attitudes during this time as customers cancel reservations and go back to shopping online. For many businesses in the service sector, “the holidays are the most important stretch of the year.” However, “fewer customers have visited restaurants in recent weeks than in November. For the week ending on December 20, restaurant seatings were down 11% compared to the same stretch in 2019, according to data from OpenTable.” This comes as many restaurants “were already struggling with a labor shortage and a sharp rise in wholesale prices” and a drop in customer confidence as COVID-19 cases rise.
Eater (12/21) reported, “Nearly two dozen Atlanta restaurants recently announced temporary closures due to positive COVID-19 results among employee” at a time that “couldn’t be worse for the businesses.” One of the affected stores GM was dismayed by the outcome, saying, “It’s honestly the nightmare scenario we all feared back in March 2020. ... Any extra profits we made in the glee of late spring and early summer have been decimated by the delta and now omicron surges.”
US Economy Grew At 2.3% Rate In Third Quarter
The AP (12/22, Crutsinger) reported that the Commerce Department said Wednesday that the US economy “grew at a 2.3% rate in the third quarter, slightly better than previously thought. ... The third and final look at the performance of the gross domestic product...was higher than last month’s estimate of 2.1% growth.” The AP said the gain “follows explosive growth that began the year as the country was emerging from the pandemic, at least economically.” But, “with the appearance of the omicron variant, coming on top of high inflation and lingering supply chain issues, there are concerns that growth could be constrained heading into 2022.”
Social Media Commerce Growing At “Torrid Pace”
The E-Commerce Times (1/5) reported, “Shopping on social media platforms is growing at a torrid pace — three times faster than traditional e-commerce platforms — and is on a pace to reach US$1.2 trillion globally by 2025, according to a study released Tuesday by” Accenture. Accenture Managing Director Kevin Collins said, “Like many internet trends, it will start with a younger generation, but it’s not going to stay there. ... We have TikTok moms now...and Gen X’s and boomers have been coming to TikTok over the last year and are really starting to make some noise and do some really interesting things on the platform. I think social commerce is going to go the same way.”
Facebook Marketing Tips For Small Business Owners Wages and Benefits
Business 2 Community (1/5) featured tips to help small business owners reach target audiences on Facebook. B2C discusses dynamic product ads, multi-product ads, and conversion-tracking pixels, among other tools.
Small Businesses Advised To Target “Niche Set Of Customers” At Outset
In Forbes (12/29, Schroeder), contributor Bernhard Schroeder advised small business owners and startups to initially focus on serving a “niche set of customers” within a larger market. Schroeder wrote, “The key to establishing your own niche market is research. By diligently researching niche markets, you can determine what unique segments already exist, and explore where new ones could be successfully developed based on industry or customers trends. Once you’ve found a potential niche market, it’s essential to think about whether it can become profitable via a current or new business model.” Schroeder added that the benefits to targeting a niche market are “reduced competition initially,” focused marketing efforts, product or service differentiation, and “time to build your brand loyalty.”
Six Marketing Tips For Small Business Using Instagram
NASDAQ (12/23, Crawford) featured marketing tips for small business owners using Instagram to reach customers. Several of the tips highlight how small businesses can use their Instagram accounts to appear more personable and relevant to customers, such as by giving “a few trusted employees access to the business’s Instagram account” to post content, or by highlighting employees and customers’ experiences on the account. Nasdaq also recommended planning what will be posted to Instagram ahead of time, and using features such as Stories to keep updating content without overwhelming followers with too much content.
Small Business Marketing Strategies That Work
TechRadar discussed “six small business marketing strategies that work.” These strategies are “clearly define and understand who your ideal customers are,” “outline your product values and benefits, and align your products with your customers’ needs,” “discover the best marketing channels for reaching your customers,” “create marketing and content that will resonate with your customers,” “execute your marketing campaign,” and “track what’s working and tweak as necessary.”
Tech Companies’ Marketing Strategies Seen As Flawed
European business school professors Bart de Langhe and Stefano Puntoni wrote in the Harvard Business Review (12/16), “Several major tech companies have recently built platforms that claim to educate companies about how best to market themselves and their products online.” However, “when Facebook, Google, Twitter, and other Big Tech companies ‘educate’ small businesses about their services, they often are actually encouraging incorrect conclusions about the causal effects of advertising.” The authors discussed a case in which Facebook implemented an A/B test for two ads, then optimized ad delivery with a machine-learning algorithm in a way that “actually invalidates the design of the A/B test.” The authors went to discuss similarly flawed tracking metrics from Google and Twitter.
Unemployment Rate Fell To 3.9% In December; Wage Gains Accelerated
Bloomberg (1/7, Pickert) reported the Labor Department announced last Friday that the US unemployment rate “fell below 4% and wages jumped last month, adding to evidence of a tight labor market that’s expected to help spur Federal Reserve interest-rate liftoff as soon as March despite disappointing payroll growth.”
The AP (1/7, Rugaber) reported that the unemployment rate “fell in December to a healthy 3.9% – a pandemic low – even as employers added a modest 199,000 jobs, evidence that they are struggling to fill jobs with many Americans reluctant to return to the workforce.” The AP also reported, “The drop in the jobless rate, from 4.2% in November, indicated that many more people found work last month. Indeed, despite the slight hiring gain reported by businesses, 651,000 more workers said they were employed in December compared with November.” The AP added that “wages also rose sharply in December, with average hourly pay jumping 4.7% compared with a year ago.”
Record 4.5M Americans Left Their Jobs In November
Bloomberg (1/4, Rockeman) reported a record 4.5 million Americans quit their jobs in November, according to the Department of Labor’s Job Openings and Labor Turnover Survey (JOLTS) released on Tuesday.
CNBC (1/4, Cox) reported the November increase “represented an 8.9% increase from October and broke September’s high-water mark of 4.36 million. As a percentage of the workforce, the quits rate of 3% matched September’s mark.”
Twenty-Six States Raise Minimum Wage At The Start Of 2022
CNBC (12/29, Lucas) reported, “Next year, 26 U.S. states and Washington will raise their minimum wages, but only California and parts of New York will mandate hourly pay of at least $15, according to a report from payroll experts at Wolters Kluwer Legal & Regulatory U.S.” However, many employees “will see more substantial pay increases because their employers chose to raise their pay floor on their own.” CNBC added that “20 states have the same pay floor as the federal minimum wage: $7.25 an hour. The majority of those states have elected Republicans as their current governors and have a lower cost of living than states that are raising their minimum wages.”
WSJournal: Paper Shows Expanded Unemployment Benefits Discouraged Work
In an editorial, the Wall Street Journal (1/2, Subscription Publication) cited a new working paper from the National Bureau of Economic Research which shows the job market would have recovered faster had Congress not passed and then extended expanded unemployment benefits. While the Biden Administration has dismissed claims that the expanded benefits were discouraging people from seeking work, the Journal said the paper offers evidence that was the case.
White-Collar Workers’ Salaries Growing Due To Hot Job Market, Inflationary Pressures
The Wall Street Journal (12/26, A1, Weber, Subscription Publication) reported that in the closing months of 2021, salaried employees’ compensation has risen at the fastest clip in almost two decades, federal data show. Driving white-collar workers’ increasing compensation are a hot labor market and inflationary pressures. While economists worry about a wage-price spiral, experts attribute the current increases mostly to traditional job-market forces, with inflation playing a secondary role.
Day Laborers Enjoying Higher Wages, Ample Job Opportunities
The Wall Street Journal (12/19, Caldwell, Subscription Publication) reported that amid the ongoing work shortage, day laborers find themselves with unprecedented leverage. According to workers in Pomona, California, it was common to see hourly wages of $25, compared to $15 before the pandemic, and with ample opportunities, workers were able to be more selective about what jobs they took.