NFIB Weekly News
NFIB Weekly News
Leading the News
Low Unemployment Tests Expansion-Minded Businesses To Find Workers.
The AP (5/12, Scott, Mason, Johannson) reported that while “a nearly nonexistent unemployment rate might seem like the ultimate goal for an economy,” nevertheless “a vast majority of economists believe it’s important for an economy to have a pool of unemployed workers.” According to the AP, “rock-bottom unemployment” poses a challenge, in that it “restrains the ability of businesses to expand, which in turn puts the brakes on economic growth.” Growing demand for skilled workers is causing some firms to partner with schools on worker training programs, and “demand for skilled workers has created something of a bidding war” in some sectors. In addition, some businesses “are trying to incentivize workers with things besides higher pay, offering perks like education reimbursement, transportation reimbursement and in mountain resorts, housing assistance,” and they are “also offering opportunities for professional development and creating a company culture that helps not only draw in new employees but retain the current staff are well.”
Small Business Optimism Index Sustains Record Highs In April. Business Climate
NFIB’s Small Business Economic Trends Survey saw the “17th consecutive month of historically high readings” in April. NFIB CEO and President Juanita Duggan is quoted saying, “Never in the history of this survey have we seen profit trends so high. ... The optimism small businesses owners have about the economy is turning into new job creation, increased wages and benefits, and investment.” Positive profit trends increased in April due to stronger sales, productivity gains, and the new tax law, while 22 percent cited the difficulty of finding qualified workers as the single most important business problem. Chief Economist Bill Dunkelberg is quoted saying, “There is no question that small business is booming. ... Consumer spending, the new tax law, and lower regulatory barriers are all supporting the surge in optimism across all small business industry sectors.”
BoA: Small Business Growing More Confident In US Economy.
Fox Business (4/26) reported that small business “is growing more confident in the U.S. economy, according to a new study by Bank of America.” The study “found 54% of business owners in America expect to see the economy strengthen in the coming year.” The new outlook “is due, in part, to President Donald Trump’s sweeping overhaul of the U.S. tax system, which has given small businesses the opportunity to hire, increase wages and invest in their businesses.”
USA Today (4/26, Davidson) reported small business owners “such as Sandeep Thakrar are overhauling their 2018 business plans as a result of the sweeping federal tax cuts, with many saying they’ll use their savings to boost investment, hire more workers and dole out raises, a new Bank of America survey shows.” Thakrar “owns Neema Hospitality, which operates 10 limited-service hotels in Pennsylvania, Maryland and West Virginia under the Marriott, Hilton, Choice and IHG brands. Among his plans: renovations at his properties. He’s even considering expanding.”
Mnuchin Optimistic Trade Standoffs Can Be Resolved.
The AP (4/22, Wiseman, Crutsinger) reported the IMF and World Bank “repeatedly warned at their meetings this week that intensifying trade tensions could jeopardize a healthy global economic expansion.” But Treasury Secretary Mnuchin “expressed cautious optimism Saturday that countries could settle their differences without a trade war.” Mnuchin, who met “during the past three days with financial officials from China, Japan and Europe over a series of punitive tariffs unveiled by the Trump administration against China and other trading partners,” told reporters, “We are cautiously optimistic.”
US Could Seek Farming, Car Manufacturing Concessions In TPP Talks.
The Wall Street Journal (4/15, Davis, Subscription Publication) reported that if the US were to follow up on the President’s reported desire to re-enter the deal, both sides would seek concessions. In contrast to the pre-2016 period, the US would now negotiate with the TPP-11 bloc, where countries such as Japan, Malaysia and Vietnam are expected to view a US re-entry favorably. In negotiations, the US could push for Japan to improve access to US farm products, particularly a reduction in rice tariffs. To the Journal, Japan may view that as a reasonable price to pay to get the US back in the agreement.
March Small Business Optimism Index Continues 16-Month Streak Of Historically High Results.
NFIB’s SBET for March showed a small business optimism index of 104.7, down from February’s 107.6 from February but still within the top five percent of 45 years of survey results. NFIB indicated that March’s index continues a 16-month streak of results in the top five percent. NFIB President and CEO Juanita Duggan was quoted saying, “It has been a remarkable 16 months for small business optimism. ... This is the first time in 35 years where the fewest number of small business owners have told us that taxes are their number one business problem.” Chief Economist Bill Dunkelberg was quoted adding, “Hiring and spending on new buildings and land acquisition remained at strong levels, a good sign of confidence in economic prospects.”
Labor Department: US Import Prices Rose 0.3% In April, Less Than Expected.
Reuters (5/11, Mutikani) reported that the Labor Department announced on Friday that “US import prices rose less than expected in April as a rebound in the cost of petroleum products was tempered by a drop in food prices, the latest indication that inflation pressures were increasing moderately.” The department said “import prices gained 0.3 percent last month after falling 0.2 percent in March.” According the Reuters, “Signs of a moderate build-up of price pressures suggest the Federal Reserve will continue to gradually raise interest rates even as inflation is flirting with the US central bank’s 2 percent target.”
Trump Urges Patience On Trade Talks With China, Says “It Will All Work Out.” Small Business Marketing
The Washington Examiner (5/13, Caralle) reported that in a Sunday tweet, President Donald Trump urged patience with China trade talks. Trump wrote, “China and the United States are working well together on trade, but past negotiations have been so one sided in favor of China, for so many years, that it is hard for them to make a deal that benefits both countries. But be cool, it will all work out!”
Lighthizer: US “Ready To Continue Working” On NAFTA Renegotiations.
Reuters (5/11, Beech) reported USTR Lighthizer in a statement on Friday said the Administration “is ready to continue working with Mexico and Canada to achieve needed breakthroughs on these objectives.” Lighthizer added, “Our teams will continue to be fully engaged.”
German Minister Calls For New EU-US Trade Deal Focused On Industrial Sector.
Reuters (5/5) reported German Economic Minister Peter Altmaier told a local newspaper that the stalled Transatlantic Trade and Investment Partnership (TTIP) has “proved to be unrealizable,” but that the two nations “should talk about doing something new, such as an understanding concerning selected industrial products.” Reuters noted, “Berlin is urging its European partners to show some flexibility and pursue a broad trade deal that benefits” both the US and Europe, but “some countries are resisting,” with France in particular seeking “a tougher EU stance against” President Trump’s threat of steel and aluminum tariffs.
Labor Department: Unemployment Rate Falls To 3.9 Percent.
The AP (5/4, Boak) reported that the Labor Department announced Friday that the unemployment rate fell to 3.9 percent in April, “after having held at 4.1 percent for the prior six months.” As in March, the rate was the lowest since Dec. 2000. The economy added 164,000 jobs, “up from an upwardly revised 135,000 in March,” while the construction industry added 17,000 jobs. The African-American unemployment rate fell to 6.6 percent, the lowest since the rate was first tracked in 1972. The average hourly wage rose 2.6 percent YoY.
Dollar Remains Strong After High US Jobs Data. Reuters (5/7) reported the dollar “stayed near its 2018 peak on Monday after US jobs and wages data did little to temper perceptions of strength in the US economy, though renewed concerns about trade frictions could cloud its outlook.” The euro “changed hands at $1.1962, not far from Friday’s four-month low of $1.1910,” and the dollar “stood little changed at ¥109.10, off its three-month high of ¥110.05.”
ASEAN Nations Brace For Possible US-China Trade War.
The Wall Street Journal (4/28, Watts, Subscription Publication) reported delegates attending the Association of Southeast Asian Nations summit expressed concerns that their nations would be significantly exposed to the possible ramifications of a US-China trade war, with Singaporean Prime Minister Lee Hsien Loong calling the US-China trade tensions “our most immediate and worrying concerns.” Analysts and trade negotiators have said that the region has done little in preparation for a possible trade war, meaning they will not likely conclude negotiations on possible agreements aimed at mitigating the negative effects.
Sen. Gillibrand Introduces Bill To Bolster Funding For Employee-Owned Small Businesses.
PlanSponsor (5/11) reported that Sen. Kirsten Gillibrand recently introduced a bill, “the Main Street Employee Ownership Act of 2018.” The preamble says the bill is designed to “expand opportunities to available employee-owned business concerns through Small Business Administration loan programs, and for other purposes.” The bill “would amend Section 7(a) of the Small Business Act, expanding loans to small business employers for the purpose of transferring ownership of the company to employees,” and would “provide $500 million in support of employee stock ownership plan (ESOP) programs and would operate through the Small Business Administration.”
Sen. Cortez Masto Commends SBA’s 2018 Nevada Small Business Person Of The Year. Wages and Benefits
Sen. Catherine Cortez Masto wrote in commentary for the Las Vegas Review-Journal (5/12) that “Nevada’s mall businesses are the backbone of our state’s economy. National Small Business Week, which ran from April 29 through May 5, gave us a chance to celebrate the job creators and community leaders that employ 42 percent of Nevadans and account for 91 percent of all employers in the state,” and small business owners “such as Nevada’s 2018 Small Business Person of the Year, Mehdi Zarhloul, are inspiring examples of how the federal government can help support hardworking Nevadans with a vision, a strong work ethic and a dream to reach their full potential.”
Honolulu Entrepreneur Encourages Others To Support Small Businesses.
KITV-TV Honolulu (5/13, Ako) said that “Americans all over the country recently marked National Small Business Week. According to the US Small Business Administration, this state has nearly 129,000 small businesses, which hire half of all workers in Hawaii! But it’s not always easy to be your own boss.” Honolulu entrepreneur Aran Higa invented “the Dream Sling,” a travel pillow. Higa said, “Becoming a small business has been very difficult. Like, acquiring intellectual property; I have three patents for this.” Those patents “took two and a half years and $30,000 to get,” and the process gave Higa a new appreciation for entrepreneurship. He said, “Small businesses offer the niche services people want. All small business owners will probably be in debt for the first two to three years. Please give them a chance!”
House Passes Bill To Make It Easier To Create SBICs.
The Ripon Advance (5/10) reported the House of Representatives recently passed the Spurring Business in Communities Act, which is designed “to encourage the formation of more Small Business Investment Companies.” The bill’s sponsor, Rep. Cathy McMorris Rodgers, said that SBICs are pivotal in providing capital to small businesses and startups. But, currently there are no SBICs in McMorris Rodgers’ home state of Washington. “My bill will help change that by making it easier for them to form here in our state, invest in people in our community, grow our local economy, and create jobs,” she said.
Facebook, Google May Have Slower Ad Growth, While Amazon, Snapchat Ramp Up.
Digiday (5/11, Moses) reported on signals that suggest Facebook and Google may face slowing growth from their digital ads, with Amazon and Snapchat getting “most of the credit for the duopoly’s share erosion.” EMarketer said in March that it expected Facebook and Google to lose shares as Amazon and Snap grew faster than forecast, while the Internet Advertising Bureau (IAB) said in a May report that search ads’ share of the market “declined to 46.2 percent in 2017 from 47.7 percent in 2016, and social media, with one-fourth of the market, is maturing.” Amazon’s growth is occurring on a smaller user base, but its “big selling point is that it knows what people actually buy, not just (in Google’s case) what they’re searching for.”
Communities Across The Country Continue Celebrating National Small Business Week.
In a piece for the Baltimore Times (5/4) headlined, “The Best Way To Celebrate National Small Business Week? Shop Local,” author and small business advocate Quint Studer wrote that “April 29 to May 5, 2018, is National Small Business Week. Since 1963 this week has been designated to recognize the impact of America’s entrepreneurs and small businesses. The best way to celebrate and honor small businesses and local entrepreneurs this week – and all year long – is to do business with them.”
Washington Post: “Near-Universal” Healthcare Plan “Wouldn’t Break The Bank.”
The Washington Post (5/13) editorialized that economists at the Urban Institute on Sunday released a proposal that “would get the nation to near-universal health-care coverage and relieve many of the financial burdens some people face under the current system — and cost the federal treasury far less than more radical plans.” While it would leave in place Medicare and the employer-based healthcare system, it would create “a new health-care marketplace for most everyone else — those on Medicaid and the Children’s Health Insurance Program...and those buying insurance on their own in the individual market.” According to the Urban Institute, the plan would cover “about 16 million additional people” and cost the government “about $98 billion in the first year — a lot, to be sure, but far less than a switch to single-payer.”
Democrats To Campaign On Government Healthcare Expansion In Midterms.
The Wall Street Journal (5/11, Armour, Epstein, Subscription Publication) reported Democrats are embracing expanding the government’s role in healthcare as a central issue in the mid-term elections. The Journal highlighted how the issue is playing in Minnesota, a state narrowly won by Hillary Clinton in 2016, which has two Senate races and five House races in the upcoming election. While Democrat candidates are successfully campaigning on expanding Obamacare in the primaries, some party operatives worry the position may not appeal to centrist voters in the general election.
NYTimes Analysis: Despite Trump’s Claim, Parts Of ACA Remain In Place.
The New York Times (5/6, Rappeport, Subscription Publication) reported that while President Trump “assured his supporters” at a recent rally in Michigan “that he had kept his promise to abolish the Affordable Care Act – even though Congress had failed to repeal” it, “many parts of the Affordable Care Act remain in place,” and the Administration “is even enforcing some of its provisions more aggressively than President Barack Obama did – a reality that has enraged business groups and Republicans in Congress who still want the law officially repealed.” According to the Times, the individual mandate is gone, but the employer mandate “is very much alive” and the IRS “has been pursuing companies that fail to comply.”
Professor Argues For Federal Guarantee Of Employment.
In an op-ed for the New York Times (4/25, Subscription Publication), Erik Loomis, an associate professor of history at the University of Rhode Island, argued in favor of “a federal guarantee of employment,” writing that the idea holds great potential “for helping revive depressed communities.” Loomis added that the idea “is not the full answer to economic inequality or an automated world,” and must be “paired with a higher minimum wage and labor law reforms that allow workers to unionize and win collective bargaining agreements.”
Professor: Congress Should Choose Right Work Requirement Policies.
In an op-ed in the Wall Street Journal (4/11, Subscription Publication), Economics Professor David Neumark wrote that two more-stringent work requirements for welfare programs that federal agencies are encouraged to adopt thanks to President Trump’s executive order this week can work in opposite directions in terms of their effects on future earnings. Neumark cited research finding that a more generous Earned Income Tax Credit (EITC) leads to significantly higher earnings in the long run among less-educated single mothers – an important population group for reducing poverty. Minimum wage policies, on the other hand, lead to higher poverty and an increased reliance on public assistance in disadvantaged neighborhoods. Neumark encouraged lawmakers in Washington to pursue antipoverty policies that lead to economic self-sufficiency in the long run.
Researchers To Examine Whether Minimum Wage Increase In Minneapolis Improves Workers’ Health.
The Minneapolis Star Tribune (4/5, Olson) reported University of Minnesota researchers are “recruiting 450 low-wage workers in Minneapolis to monitor their health – and hopefully see progress – as their wages increase over the next five years because of the city’s new minimum wage standards.” The article explained that the city’s “minimum wage increase is creating a rare opportunity for researchers to” test whether higher income leads to “better health.”