NFIB Weekly News
Leading the News
Small Business Optimism Attributed To President’s Policies
Barron’s (8/14) columnist Gene Epstein wrote, “Memo to President Trump: For solid evidence, worth a tweet or two, that you deserve some economy-boosting bragging rights denied your predecessor, look no further than the third quarter’s Small Business Optimism Index.” Epstein added that NFIB CEO Juanita Duggan was quoted saying, “While many are talking about a slowing economy and possible signs of a recession, the third largest economy in the world continues to defy expectations, generating output, creating value, and expanding the economy.” Additionally, Epstein spoke with NFIB chief economist William Dunkelberg via email, with Dunkelberg offering a few reasons why small businesses have been optimistic under Trump’s presidency: “Small business owners strongly supported the campaign promises of tax reform and a reduction in regulatory burdens...two of the most significant problems voiced by small business owners.”
Small Business Optimism Sees Comeback In July Business Climate
The NFIB Small Business Optimism Index (8/13) for July rose to 104.7, an increase of 1.4 points, indicating a comeback in small business optimism and solid gains in expectations for business conditions, real sales, and expansion. NFIB President and CEO Juanita D. Duggan was quoted in reference to the US small business sector as saying, “While many are talking about a slowing economy and possible signs of a recession, the 3?? largest economy in the world continues to defy expectations, generating output, creating value, and expanding the economy. ... Small business owners want to grow their operations, and the only thing stopping them is finding qualified workers.” NFIB Chief Economist William Dunkelberg was quoted saying, “Contrary to the narrative about impending economic doom, the small business sector remains exceptional. This month’s index is a confirmation that small business owners remain very optimistic about the economy but are being hamstrung by not finding the workers they need.”
Labor Department: US Labor Force At An All-Time High
The AP (8/2, Boak) reported the Labor Department said Friday that “U.S. employers slowed their hiring in July but still added a solid 164,000 jobs to an economy that appears poised to extend its decade-long expansion.” The unemployment rate was unchanged at 3.7%, while “average hourly earnings rose 3.2% from a year ago, up from a 3% year-over-year gain in June.” According to the AP, “Unemployment is near a half-century low,” and “the overall U.S. economy remains on firm footing.” A front-page Wall Street Journal (8/2, A1, Chaney, Kiernan, Subscription Publication) article also hailed the figures as a good sign for the US economy.
Mulvaney Says Trump Will Sign Budget Deal
Politico (7/28, Parthasarathy) reported, “President Donald Trump will sign the massive budget deal that’s headed to his desk, acting White House chief of staff Mick Mulvaney said on Sunday.”
Meanwhile, Rick Berger and Gary Schmitt, research fellow and resident scholar at the American Enterprise Institute, argued in the Wall Street Journal (7/28, Subscription Publication) that contrary to Trump’s claims, the deal is no victory for the US military, which in fact requires much higher funding than even this Administration is providing.
NFIB CEO Opposed To Federal Minimum Wage Increase
Chamber Business News (AZ) (7/25) reported that opponents of the proposed $15 federal minimum wage “indicate it would pull millions out of work. Small businesses and rural America would suffer most, they said.” NFIB President and CEO Juanita Duggan called on the US Senate to block the proposal, saying, “The House dealt a devastating blow to small businesses today, risking record growth, job creation, and already increasing wages. In states and municipalities across the country, a mandated minimum wage hike has consistently led to lost jobs, production, and income, and it must not be replicated on the federal level.”
NFIB, Other Business Groups, Critical Of Federal Minimum Wage Increase Vote
CNBC (7/18, Rod) reported, “The House of Representatives’ decision to pass a bill raising the federal minimum wage to $15 an hour received almost immediate criticism from major business organizations.” NFIB President and CEO Juanita Duggan was quoted saying, “The House dealt a devastating blow to small businesses today, risking record growth, job creation, and already increasing wages.”
Strong Dollar Straining Corporate Earnings, Commodity Prices
The Wall Street Journal (8/18, A1, Iosebashvili, Subscription Publication) reported the strong dollar is putting pressure on domestic corporate earnings, stressing commodity prices, and creating concern about an emerging market sell-off. The dollar is near its highest level in two years against a basket of six major currencies.
US Consumer Sentiment In August Fell To Second Lowest Level Since 2016 Election Small Business Marketing
Bloomberg (8/16, Korte, Haar) reported the University of Michigan Consumer Sentiment Index “fell in August to its second-lowest level since just before the 2016 election,” but according to Richard Curtin, the survey’s director, “a deeper look of the numbers by party affiliation shows warning signs for Trump.” Curtin recommended keeping an “eye on...the independents because whoever wins the majority of independents will win the presidency.”
Treasury Department Discusses Plan To Issue 50- And 100-Year Bonds
Bloomberg (8/16, Harris, Barrett) reported the Treasury Department “said Friday that it wants to know what investors think about the government potentially issuing 50-year or 100-year bonds, going way beyond the current three-decade maximum.” According to Bloomberg, while the government “stressed that no decision has yet been made on ultra-long bonds,” the announcement “follows a plunge in the 30-year yield to a record low this week below 2%, and also comes in the wake of many other nations opting to extend their borrowing profiles with so-called century bonds.”
Media Analyses Examine Prospect Of Recession In 2020
In a front-page analysis, New York Times (8/17, A1, Irwin) senior economics correspondent Neil Irwin asserted the US “almost certainly isn’t in a recession right now” and “may well avoid one for the foreseeable future,” but the likelihood of a recession “increased sharply in the last two weeks.” He added that to understand how a recession could take place in 2020, “there are plenty of clues, in the details of recent economic reports, in signals from the markets, and in the recent history of recessions and near recessions.”
Under the headline “A Year Of Stock Market Fury, Signifying Nearly Nothing,” the New York Times (8/17, Phillips) asserted that in the face of “mixed messages emanating from the economy and central bankers and politicians, the turbulence this past week is likely to continue. The question is where it will come from. And when it will hit. And how violent it will be.” According to the Times, the answer to these questions “matters to anyone with a 401(k) or a mutual fund. But it especially matters to the president, who has repeatedly used the market’s performance as a proxy for his performance in the White House.”
Kashkari Says Fed Likely Needs To Cut Interest Rates, As Mester Calls For Evaluating Scenario
Reuters (8/16) reported that Minneapolis Federal Reserve Bank President Neel Kashkari said Friday that the Fed “likely needs to cut interest rates and take aggressive measures to counter an economic slowdown.” According to Reuters, Kashkari, “who does not have a vote on monetary policy this year but participates in policy discussions at the U.S. central bank, said the Fed may have gone too far in raising rates in recent years, echoing a criticism frequently made by” President Trump. However, Reuters said Kashkari “disputed the view that high rates were the economy’s biggest problem,” and “instead, he pointed to economic concerns that have grown more acute as Trump has intensified a trade war with China.”
Meanwhile, Cleveland Fed President Loretta Mester told Reuters (8/16, Hunnicutt) that she is “considering whether to support [a rate cut] now given risks that a U.S.-China trade war and global slowdown could derail the economy.” Mester said, “I could see scenarios where we hold rates steady. I could see scenarios where we move the rate down. I think we just have to take the time to really evaluate.”
Unemployment Claims Fall To 209,000
Reuters (8/8, Mutikani) reported according to the Labor Department, “initial claims for state unemployment benefits fell 8,000 to a seasonally adjusted 209,000 for the week ended Aug. 3,” which suggests, according to Reuters, that “the labor market remains strong even as the economy is slowing.” A Reuters survey of economists found they expected claims to “be unchanged at 215,000.”
Adobe Partnership Increases Microsoft’s CRM Capabilities
ZDNet (8/12, Greenberg) contributor Paul Greenberg wrote Microsoft, “another of this year’s CRM Watchlist winners, is perhaps the most complex of all because of the clarity of their vision and because they are dedicated to carrying it out – from products/services and partnerships to corporate social good.” ZDNet said “what increases both the complexity and the value of the business applications is the partnership with Adobe.” What it means “for biz apps (as Microsoft likes to call it) is that Adobe’s Experience Cloud which includes their B2C enterprise grade marketing automation solution is what Microsoft positions at the enterprise level.” On top of that, with the Adobe’s acquisition of Marketo, it is “going to be interesting to see if Microsoft uses that as their B2B enterprise-grade marketing automation platform/solution or they go with their own, which at its current level of development is suited more for the mid-market.”
CFA Institute Chief Marketing Officer Collins Pens Article On Marketing Budgets Wages and Benefits
In Forbes (8/15), Michael Collins, Chief Marketing Officer at CFA Institute, explained how to create the ideal marketing budget. Collins writes, “In the marketing field, we inevitably confront a significant decision: How much of the marketing budget should be invested in internal resources – employees – and how much should be allocated outside for marketing programs and external talents, such as agencies or freelancers.” Collins wrote, “As with most business decisions, there is no precise ratio. Still, I have found that one-third on the strategy side, usually internal and fixed, and two-thirds on execution, often external and variable, seems to be a good ratio to strive for.”
Supply Chain Finance Faces Scrutiny As Small Business Decry The Practice
Bloomberg (8/16) reported that the financial sector has recently turned its attention to a once-obscure corner of the market known as supply chain finance, where financial companies pay vendors for their outstanding invoices at an agreed discount before drawing in the whole amount once the indebted company pays their bills. While some say the practice speeds up cash flow for small businesses, many entrepreneurs argue that they wouldn’t need to consider the practice if larger companies paid their bills on time instead of pushing off payments to make their quarterly earnings reports look better. Now that major international players including SoftBank have begun investing in the sector, however, regulators have also taken an interest which could increase scrutiny of the practice in the years ahead.
Ignoring Accounting Is Common Small Business Mistake
Fundera (8/14) reported that “mistakes happen and they’ll certainly happen to you throughout the lifecycle of your business. However, by exploring the most common small business mistakes others have made – and learning what to do to avoid them – you can start your endeavor in the smartest way possible. Ignoring accounting is one of those mistakes.” Fundera said, “Even if your bookkeeper handles day-to-day accounting, you’ll want to understand basic accounting concepts. You can find courses in basic accounting and how to use QuickBooks at your local community college, SCORE, or nearby Small Business Development Center.”
Small Business Loan Application Approvals Hit Record Highs
Forbes (8/7, Arora) reported, “Approval rates for small business loan applications rose to another post-recession record (27.7%) at big banks ($10 billion+ in assets), while also climbing above 50% at small banks in July, according to the latest Biz2Credit Small Business Lending Index.” At big banks as well as regional and community institutions, small business lending is strong and growing.
Adobe Among Companies Making “Important” Products In CX Market
TechTarget (8/6) reported Adobe, Salesforce, and LogMeIn made the “most important news so far this year in the customer experience technology market, and each of their newsworthy events will have a meaningful impact on the product portfolios that the vendors offer to customers.” Particularly, in March, Adobe “introduced customer data platform (CDP) features in its customer experience (CX) product suite, adding a foundational data-handling component.”
Senate Committee Has No Plans To Consider $15 Minimum Wage Bill
Vox (8/16) reported that the “Senate has no plans to raise the federal minimum wage anytime soon.” The Senate Committee on Health, Education, Labor, and Pensions “is not considering a bill that would raise the federal minimum wage to $15 an hour, or any other increase, for that matter.” Though the Congressional Budget Office said the Raise the Wage Act “could trigger 1.3 million job losses for low-paid workers,” the “most recent academic research suggests that’s unlikely and would lead to few if any lost jobs.”
Labor Department: Summer Youth Unemployment Rate Fell To Lowest Level Since 1966
The Wall Street Journal (8/16, Chaney, Subscription Publication) reported the Labor Department on Friday said the unemployment rate for Americans aged 16 to 24 fell to 9.1 percent in July from 9.2 percent last year. The Journal says that according to the Labor Department, this is the lowest rate since youth employment fell to 8.8 percent in July 1966.
Analysis: Increasing Federal Wage Likely To Become Unnecessary Thanks To State, Corporate Action
In an analysis, Wall Street Journal (8/11, Morath, Subscription Publication) labor economics and policy reporter Eric Morath argued the federal minimum wage may become irrelevant as Amazon and dozens of other large employers and 29 states have set their own minimum wage higher.
Hourly Retail Minimum Wage Hit Record Mark Thanks To Support From Top Retailers
Retail Customer Experience (8/6) reported the “hourly retail minimum wage is the highest it has been since the end of 2003, primarily due to top retailer support for increased pay.” In fact, retail “titans Walmart and Target have been steadfastly promoting increasing the minimum wage with Walmart raising its hourly pay to $9 four years ago and $11 as of this year.”
Several US States Proposing Laws Increasing Number Who Qualify For Overtime Pay
The Wall Street Journal (8/7, Feintzeig, Subscription Publication) reported on proposals in several states to increase the number of workers who qualify for overtime pay. Washington state, for instance, is considering a rule that would increase the annual salary threshold for those who qualify for overtime pay threefold. Additionally, in Maine and Massachusetts, legislators are considering bills that would increase the number of workers eligible for overtime pay.
Administration May Release Healthcare Plan In September
The Wall Street Journal (8/3, Armour, Restuccia, Subscription Publication) reported the Administration is thinking about announcing a healthcare plan in September as part of its 2020 campaign strategy. The proposal could include covering preexisting conditions and the ability to sell insurance across state lines, according to sources.