NFIB Weekly NewsLeading the News US Consumer Prices Rose “More Than Expected” In January. (02/20/2018)
Reuters (2/14, Mutikani) reported that Labor Department data released Wednesday show that “US consumer prices rose more than expected in January as Americans paid more for gasoline, rental accommodation and healthcare, raising pressure on new Federal Reserve chief Jerome Powell to prevent a possible overheating of the economy.” However, the department’s inflation report “likely overstates the inflation picture given that some of the price gains, especially for apparel and motor vehicle insurance, are seen by economists as unsustainable.” The Federal Reserve “has forecast three rate hikes for this year, with the first increase expected at its next policy meeting in March.”
Record Number Of Small Business Owners Consider Now A Good Time To Expand. (02/13/2018)
The NFIB’s Small Business Economic Trends Survey (2/12) for January saw a “record” number of small business owners say that now is a good time to expand. Furthermore, reported actual earnings climbed to the highest level reported since 1988. NFIB president and CEO Juanita Duggan is quoted saying, “Main Street is roaring. ... Small business owners are not only reporting better profits, but they’re also ready to grow and expand. The record level of enthusiasm for expansion follows a year of record-breaking optimism among small businesses.” NFIB Chief Economist Bill Dunkelberg is quoted saying, “The historically high index readings over the last year tell us small business owners have never been more positive about the economy. ... This is in large response to the new management in Washington tackling the biggest concerns of small business owners – high taxes and regulations.”
Powell Comes To Fed With Economy Showing “Signs Of Strain.” (02/06/2018)
The New York Times (2/4, Appelbaum, Subscription Publication) wrote that Jerome Powell will become Federal Reserve chairman on Monday “as a half-decade of economic tranquility is beginning to show some signs of strain.” The Times said Powell faces a “high wire” as he strives to keep the economy “in the safe space between overheating and recession. ... He has said that he plans to continue the Fed’s gradual retreat from the economic stimulus campaign it mounted after the 2008 financial crisis, and markets have taken him at his word.” But it is not clear how he would respond to a financial crisis.
Former Treasury Secretary Lawrence Summers wriote in the Washington Post (2/4) that “the first challenge facing the estimable” Powell “is working out how to achieve growth that is both adequate and financially sustainable. ... Except in the aftermath of recessions, it has been a long time since the US economy grew well with a stable financial foundation.”
Trump Expected To Tout Economy, Urge Bipartisan Cooperation In State Of The Union. (01/30/2018)
As President Trump prepares to deliver his first State of the Union address tonight, media coverage predicted that he will tout economic gains during his first year in office and call for bipartisan cooperation with Democrats. The AP (1/28, Thomas) reported that in an effort to “move past the shadow of the Russia investigation,” Trump will use the address to “cite economic progress under his watch while pushing for bipartisanship with Democrats on issues such as rebuilding roads and bridges.”
USA Today (1/28, Jackson) said Trump and his aides are projecting confidence about the address. In a tweet Sunday that “looked like a preview of his speech,” Trump wrote, “Our economy is better than it has been in many decades. ... Businesses are coming back to America like never before ... Unemployment is nearing record lows. We are on the right track!” The Wall Street Journal (1/28), Radnofsky, Nicholas, Subscription Publication) said the White House, in previewing the address, has stressed that it will be “very forward looking” and will strike a tone of bipartisanship.
Media Analyses: Trump’s Speech Declaring US “Open For Business” Mostly Well Received At World Economic Forum. (01/30/2018)
President Trump completed his two-day visit to Davos, Switzerland on Friday with a speech hailing his “America First” policies at the World Economic Forum. Media coverage highlighted the generally warm response to Trump’s speech, with the exception of his remarks about immigration and the media.
The New York Times (1/26), A1, Baker, Subscription Publication) reported on its front page that “in an encounter that might have surprised even him two years ago, Mr. Trump reassured the world’s political and financial leaders that his ‘America First’ agenda was not a rejection of international cooperation,” as the President’s persona as a “combative nationalist gave way to the let’s-make-a-deal businessman.” Trump told the packed audience attending his speech, “I believe in America. ... As president of the United States, I will always put America first, just like the leaders of other countries should put their country first also. But America first does not mean America alone. When the United States grows, so does the world.” In a front-page article, the Wall Street Journal (1/26, A1, Ballhaus, Nicholas, Subscription Publication) reported that he added, “I am here today to represent the interests of the American people, and to affirm America’s friendship and partnership in building a better world.”
Trump Said To Be Softening Stance On NAFTA. (01/16/2018)
Jonathan Swan reported for Axios (1/14) that President Trump “is developing a softer attitude” towards NAFTA. Swan said “five sources who’ve spoken privately with Trump about NAFTA say he’s taking more seriously the risks of withdrawing.” In addition, a “conga-line of Republican senators have met with the president and explained to him why they consider NAFTA so important to their states.” Reportedly, two arguments have “helped change Trump’s thinking: Withdrawing from NAFTA might interrupt the stock market’s record-breaking run under his presidency,” and “would harm farmers and agricultural communities – whom Trump considers ‘my people.’”
Business Climate Pence, Chao Promote Tax Reforms, Infrastructure Plan. (02/20/2018)
In a Dallas (TX) Morning News (2/16, Pence) op-ed, Vice President Pence highlights how the Administration’s economic push has “spurred a remarkable American comeback.” He goes on to promote the recently passed tax law, saying that it will lead the nation into “a new era of growth and optimism” by saving taxpayers money and supporting job and wage growth. Pence adds that the law is “exactly what Texas families need,” and promises that the Administration will “continue to build on our momentum by cutting more red tape, unleashing even more of our nation’s boundless natural resources and passing a historic infrastructure bill that will rebuild America.”
Bank Of America CEO: Tax Reform Was “Right Thing” For US Economy. (02/20/2018)
USA Today (2/15, Bomey) reported that in an interview at the Economic Club of Washington, DC, on Thursday, Bank of America CEO Brian Moynihan said tax reform was “the right thing for the United States.” USA Today noted that Bank of America “bank recently gave $1,000 bonuses to many of its employees,” adding that “dozens of other companies made similar moves.”
Amazon Said To Be Partnering With BofA For Lending Program. (02/20/2018)
CNBC (2/14, Kim) reported that Amazon Lending, Amazon’s small business lending program, has formed a partnership with Bank of America, according to “people familiar with the matter.” The deal “allows Amazon to reduce its risk and access capital specifically to provide credit to more merchants so they can acquire inventory.” The program offers loans of $1,000 to $750,000 for companies that may have trouble borrowing money from more traditional lenders. MarketWatch (2/14) also reported the story.
Upcoming NAFTA Talks To Address Contentious Rules Of Origin. (02/20/2018)
Bloomberg News (2/16, Martin) reported that in the seventh round of NAFTA renegotiations to take place in Mexico City on Feb. 25, American, Canadian, and Mexican negotiators intend to address rules of origin, “one of the most contentious issues” or the talks. The issue is expected “to receive more than 20 hours of discussion, among the most of any topic,” according to a draft agenda obtained by Bloomberg. In an effort to revive US factories, the Administration “has proposed raising the regional automotive rules of origin for passenger cars to 85 percent from 62.5 percent and add a U.S.-specific requirement of 50 percent.” The US maintained that “the changes are needed to reduce a trade deficit with Mexico that it says is the result of companies moving factories and jobs south of the border to take advantage of cheaper labor,” but auto manufacturers have warned “the proposals would upend supply chains.”
Trump Considering Restrictions On Imported Steel. (02/20/2018)
The New York Times (2/13, Swanson, Subscription Publication) reported that President Trump “suggested” to a bipartisan group of lawmakers Tuesday that the US will likely “impose restrictions on imported metals.” Trump “said such restrictions would help save struggling steel companies from foreign competitors that ‘dump’ low-priced metal on American markets.” The Times said lawmakers who attended the meeting “are generally split along party lines on the restrictions. Democrats voiced support for the president’s action on metals, and Republicans, with the exception of Senator Rob Portman of Ohio, urged caution.”
White House Releases 2019 Budget Proposal. (02/13/2018)
Bloomberg News (2/12, Sink) reports on President Trump’s $4.4 trillion budget proposal for fiscal 2019, though the piece calls the President’s budget plan “a plan Congress is expected to all but ignore that would slash entitlements and other domestic programs in favor of higher spending on the military and immigration enforcement.” Bloomberg reports the budget plan includes President Trump’s $200 billion in federal funding for an infrastructure program that the Administration “estimates it would create as much as $1.5 trillion in investments.”
Small Business Marketing Google’s Mobile Ads Business Sees Huge Growth, Shrinking Margins. (02/20/2018)
Reuters (2/15, Dave) reported Google’s ad business “has posted three straight quarters of year-over-year double-digit sales increases,” and “is nearing $20 billion in annual revenue.” As consumers have migrated “from desktop computing to mobile, momentum has shifted to AdMob, Google’s mass-market tool for third-party apps, and DoubleClick for Publishers, its higher-end mobile software.” Google has continuously “lured app developers from competitors by lowering commissions and simplifying software.” However, this strategy has come at a cost, with Google “giving app and website creators a bigger chunk of ad sales.”
Advertisers May Be Exiting TV “For Good,” Magna Global Data Suggests. (02/20/2018)
Bloomberg News (2/14, Shaw) reported, “Advertisers may be leaving TV for good,” with ad sales falling 7.8 percent in the US to $61.8 billion in 2017, “the steepest drop outside of a recession in at least 20 years,” while cable network ad sales have dropped “for the first time in almost a decade,” according to Magna Global data. Bloomberg added that because TV ad sales have dropped “even as global advertising grows,” industry research firms and analysts “predict that the business may never recover.” The report said that pharma companies, as well as automakers and movie studios “have all slowed their spending on TV advertising...by double digits.”
More Food Companies Launching Sustainability-Driven Campaigns. (02/13/2018)
The Orlando (FL) Sentinel (2/10) reported on the “growing number of food companies” that are “trying to convince customers their food comes from safe and responsible sources.” For instance, “Darden Restaurants, Publix, Winn-Dixie and other grocers have launched their own ‘sustainable seafood campaigns,’ and other companies are rallying around commitments to animal welfare and curbing overuse of antibiotics.” Such moves come in “response to a growing consumer desire for cleaner foods such as organic and locally grown products, as well as pressure from activists to cut down on what they see as abuse in supply chains, said Steve Kirn a lecturer at the University of Florida’s Miller Retail Center.”
Facebook Testing “Downvote” Button For Flagging Content. (02/13/2018)
The Drum (UK) (2/10, Srivastav) reports Facebook “is now testing a ‘downvote’ button” as a way for people to flag posts for content that “is inappropriate, uncivil, or misleading.” Facebook said the downvote button is getting a small test in the US. The Drum says Facebook also said it will introduce facial recognition technology to “help users find untagged images, prevent the use of other people’s images by strangers and aid those with visual impairments know what is contained within a video or image.”
Marketers Need “An Amazon Strategy” Now, Ad Scholar Says. (02/06/2018)
Brian Sheehan, professor of advertising at the SI Newhouse School of Public Communications, posted at AdWeek (2/2, Sheehan) that a key task for marketers this year is “to develop an Amazon strategy,” in part because Amazon is getting ambitious about ad revenue, and it starts from a formidable position of knowing what customers actually purchase. Among more “sobering thoughts” is that “Amazon’s monthly reach on its site is 183 million users,” while one report found that “55 percent of U.S. internet users start a product search on Amazon, not Google or other sites.” Developing brand awareness across other channels is key to a “win on the ‘digital supermarket shelf,’” Sheehan said.
Capital One’s Endhardt Gives Tips On How Small Businesses Can Better Compete With Big Firms. (01/30/2018)
Johannes Endhardt, Capital One’s Vice President of Strategy, Marketing and Analytics for Spark Business Bank, wrote in a piece for Smart Hustle (1/26) about how small businesses can better compete with big businesses this year. He noted small business optimism “has been on an upward swing with the majority of small business owners citing increased sales and improved business conditions throughout 2017, according to the latest Capital One Small Business Growth Index.” Among the tips he provided were: running promotions, utilizing social media, and formulating a budget for the year.
Wages and Benefits Trump Budget Includes Funds To Subsidize ACA Insurers. (02/20/2018)
The Washington Times (2/18, Howell) reported that while President Trump canceled cost-sharing payments to insurance companies, his new budget includes money to fund the “contentious payments...in a move that conservatives say will end up sustaining” the ACA. Trump’s request has “anger[ed] conservative groups that see little reason for Mr. Trump and the Republican-led Congress to reverse a hard-won victory over Obamacare.” The Times called the move “surprising not only because of Mr. Trump’s past criticism but also because the administration seems committed to trying to dismantle the 2010 Affordable Care Act piece by piece.”
Labor Department Becomes More Employer-Friendly Under Trump Administration. (02/20/2018)
Restaurant Business Magazine (2/13, Romeo) reported that last month, the Department of Labor announced a proposal that “would enable employers like restaurateurs to band together, even across state lines, for more leverage in negotiating rates from” health insurers. The proposed change “is just one of the recent examples of the DOL becoming more employer-friendly under President Trump.” The DOL “has also delayed adoption of new overtime-pay regulations, which would have doubled the salary threshold determining which restaurant employees are eligible for overtime pay when they work more than 40 hours per week, as proposed by the Obama administration.” Late last year, the agency also proposed a rule that would allow employers to pool tips and use them as they see fit as long as all of their workers are paid at least the minimum wage.
Forbes (2/11) contributor Panos Mourdoukoutas discussed what he says is the “official explanation” for some retailers’ recent decision to raise the minimum wage and offer cash bonuses and paternal leave to their employees. Citing the “recent corporate tax cut,” Mourdoukoutas said “lower tax rates leave American companies with larger after-tax profits, which in the name of fairness and good publicity, they are willing to share with employees.”
The US’ National Home Healthcare Industry Infrastructure May Not Be Prepared For Aging Population. (02/13/2018)
Bloomberg News (2/9, Kim) reported on the home care industry in a 4,100-word article. The piece highlights projections that 80 million people will be over 65 by 2050, compared with 50 million today. The article also discusses the growth in the number of home health agencies, the “aide shortage,” government programs’ spending on home healthcare, and the work conditions for home healthcare workers. The article observes, “As the first wave of 76 million baby boomers turns 70, our long-term-care infrastructure will bend from the strain.”
Average Wages Rose Over 3% In Half US States In 2017, A Sharp Increase. (02/06/2018)
Reuters (2/5) reports, in an analysis of state data, that “the kind of pay raises for which American workers have waited years are now here for a broadening swath of the country.” The Reuters analysis found that “average pay rose by more than 3 percent in at least half of US states last year, up sharply from previous years.” President Trump “says his tax cuts and regulation rollbacks are lifting business sentiment,” and in his State of the Union address last Tuesday, he said American workers “are finally seeing rising wages.” Average hourly wages “were up 2.9 percent in January year-on-year, the biggest rise in more than 8-1/2 years.” While conducting its analysis, Reuters said interviews across the country found “wage increases in industries ranging from manufacturing to technology and retail.”
Nine Democratic-Leaning States Mull Health Insurance Mandates. (02/06/2018)
The Wall Street Journal (2/3, Armour, Subscription Publication) reported that at least nine states – California, Connecticut, Hawaii, Maryland, Minnesota, New Jersey, Rhode Island, Vermont, and Washington, as well as the District of Columbia – may require residents to have health insurance following the repeal of the Affordable Care Act’s individual mandate. The Journal said this could be the latest sign that traditionally Democratic states will keep or expand ACA components, while Republican states will move in the opposite direction.
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