NFIB Weekly NewsLeading the News Dollar Strengthens On Optimism About US Economy. (10/16/2018)
Reuters (10/12, Finn) reported that the dollar rose last Friday, “reflecting investor confidence in the U.S. economy, despite criticism by President Donald Trump of the Federal Reserve and a sell-off in U.S. equities.” The dollar index held at 95, while the euro rose against the dollar to “a weekly high at 1.1611 after minutes of the last European Central Bank meeting set a positive tone.” The yen “traded at 112.34 on Friday. It had strengthened to 111.83 versus the dollar on Thursday, its highest since Sept. 18.”
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.”
Business Climate Kudlow: Best Way To Challenge Russia Is Boosting US Energy Production. (10/16/2018)
The Hill (10/8, Manchester) reported National Economic Council Director Larry Kudlow said in an interview that aired Monday that the US “needs more focus on its energy sector as a means of challenging Russia.” Kudlow told Hill. TV, “We are the dominant energy power. We will be producing 15 million barrels of oil per day in a couple years. We’re passing [the] Saudis. We’re passing Russia.” He added, “We have so much natural gas...they don’t know what to do with it. They’re flaring it ‘cause they can’t use it. ... So what does that mean? Means we have to have infrastructure for pipelines” to “get this stuff to Europe and challenge Russia’s hegemony on nat gas and LNG [liquified natural gas].”
Mnuchin Says Democrats To Blame For Deficits. (10/16/2018)
CNN (10/11, Borak) reported, “US deficits are expected to balloon to $1 trillion when official figures are released next week – but Treasury Secretary Steven Mnuchin says the massive Republican tax cut won’t be to blame.” Rather, Mnuchin “said Democrats were at fault for pushing spending increases on health and education in exchange for military budget increases as part of a massive spending package President Donald Trump signed in September 2017.” He said in a Thursday interview with CNN, “People are going to want to say the deficit is because of the tax cuts. That’s not the real story. The real story is we made a significant investment in the military which is very, very important, and to get that done we had to increase non-military spending.” The piece notes that, to avoid a government shutdown, both parties “struck a deal last year that included raising the spending on other government programs.”
SBA’s Salisbury: Tax Cuts Fueling Small Business Optimism. (10/16/2018)
In a piece for the Springfield (MO) Business Journal (10/10), Small Business Administration Region VII administrator Tom Salisbury said, “Last week, lawmakers in the U.S. House of Representatives passed what they are calling ‘Tax Reform 2.0’ – a permanent extension of tax law changes for individuals.” Some of the “favorable responses” so far to the temporary individual tax rate changes “became apparent in recent small-business surveys and reports. Another impactful change is the nearly doubling of the amount small businesses can expense, now up to $1 million under IRS code Section 179 in 2018.” Salisbury said, “these tax cuts should definitely be made permanent. In our region, the reward would be the growth and the sustainability of our many small communities.”
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.
Small Business Marketing Small Business Can Compete With Or Work With Amazon For Cyber Monday. (10/16/2018)
The E-Commerce Times (10/12, Allen) reported that small and medium size businesses (SMBs) can compete with Amazon on Cyber Monday. To do so, they must understand that Amazon’s “reach and ubiquity already is unmatched, and Amazon continues to grow. Understanding why consumers shop with Amazon, how to leverage your own ‘Prime,’ and not ruling out ways to leverage Amazon as an asset will contribute to success in playing on the competitive field it dominates this holiday shopping season.” SMBs should not rule out selling on Amazon, the article reports.
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.”
Wages and Benefits Texas Seen As Hotbed For Wage Theft. (10/16/2018)
The San Antonio Express-News (10/14, Whyte) reported from McAllen, Texas about “thousands” of complaints “filed against employers in the Rio Grande Valley, a national hotbed for wage theft.” According to the Express-News, “In the past 10 years, the Labor Department has investigated more than 1,350 wage theft cases in the region, resulting in payments of more than $8.5 million in back pay, records show. ‘As far as I know, it has been an epidemic in the Valley forever,’ said Kathryn Youker, an attorney with Texas Rio Grande Legal Aid. ‘It just is sort of a facet of daily life down here.’” The Express-News added, “The Valley’s underground workforce of undocumented immigrants is a key component of the economy and a prime target of unscrupulous employers who pay less than the minimum wage, deny overtime pay, threaten to turn complaining workers over to the Border Patrol and sometimes beat their employees, police reports and court records indicate.”
Congressional Democrats Back $15 Minimum Wage. (10/16/2018)
Politico (10/14, Noah) listed a “guide to some of the most ambitious liberal causes Democrats will have to navigate amid widespread expectations that they will at least capture the House,” including the $15 minimum wage. Politico notes that two years ago, Sen. Bernie Sanders “found few Democrats willing to support his call for raising the hourly minimum wage to $15, up from the current $7.25. Now it’s hard to find any congressional Democrat who opposes it. Bills that would phase in such an increase over several years have drawn the support of nearly two-thirds of the Senate Democratic Caucus and more than 170 House Democrats, including Minority Leader Nancy Pelosi.” While polls show both Republican and Democrat voters in favor of raising the minimum wage, “Republican opposition in the Senate would likely doom a $15 wage minimum – unless Trump supported it to shore up his image as a champion of the working class.”
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.”
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