NFIB Weekly News
Leading the News
WSJournal Analyses: US Set To Lead Economic Rebound In The West
The Wall Street Journal(4/25, Douglas, Subscription Publication) reported in an analysis that the US is poised to lead an economic rebound in the West. The Journal said North American and European economies are about to take off as newly vaccinated consumers, armed with savings built during the pandemic, return to stores, restaurants and hotels.
Another article in the Wall Street Journal (4/23, Guilford, Subscription Publication) said the US as well as global economies are exhibiting indications of stronger growth. IHS Markit indicated that its US services index increased to 63.1, which was the most elevated reading since the onset of data collection in 2009.
Media Reports Across the United States: Small Businesses Struggle to Fill Open Jobs Business Climate
News outlets are taking notice of a worrying statistic: NFIB’s March survey of small business owners showed a record-high 42% of owners reported that they have open positions they couldn’t fill. A variety of news media across the nation are reporting on this developing crisis. Read what they’re saying and how small business owners are managing with a shortage of qualified workers
NFIB Opposes Administration Tax Increase Proposals
Roll Call (4/19, Zeller) reported business groups oppose the Administration’s “bid to establish a global minimum tax on corporations” as well as the President’s infrastructure plan due to its inclusion of a corporate tax rate increase. NFIB President Brad Close was quoted saying small businesses “have been severely harmed by the pandemic and government shutdowns,” and NFIB would “remain steadfast in opposing any tax hikes.”
Fed Study: Pandemic’s Closure Of Smaller Businesses Not As Severe As Feared
The Wall Street Journal (4/16, Simon, Subscription Publication) reported recent Federal Reserve estimates indicate the economic impact from the COVID-19 pandemic led to fewer small employer closures than were predicted. A study put out last Thursday by Fed economists said the pandemic caused the permanent shutdown of about 200,000 American establishments in excess of historical levels over the course of the pandemic’s initial year.
Small Business Optimism Returns To Average Historical Level In March
The NFIB Small Business Optimism Index rose in March to 98.2, a 2.4-point increase, marking the first return to the average historical reading since last November. The Uncertainty Index also increased by six points to 81; this was primarily driven by owner uncertainty over whether the coming months are a good time for expanding their business and capital expenditures. Owners continued to have difficulty filling jobs with qualified workers, as they compete with increased unemployment benefits and some workers being kept out of the labor force by the pandemic. NFIB Chief Economist Bill Dunkelberg was quoted saying, “Main Street is doing better as state and local restrictions are eased, but finding qualified labor is a critical issue for small businesses nationwide...Small business owners are competing with the pandemic and increased unemployment benefits that are keeping some workers out of the labor force. However, owners remain determined to hire workers and grow their business.”
Small Business Optimism Increased Slightly In February
The NFIB Small Business Optimism Index rose in February to 95.8, a slight increase from January’s reading but still below the index’s 47-year average of 98. NFIB’s Uncertainty Index came in at 75, a five-point decrease. NFIB Chief Economist Bill Dunkelberg was quoted saying in a release, “Capital spending has been strong, but not on Main Street. The economic recovery remains uneven for small businesses, especially those still managing state and local regulations and restrictions. Congress and the Biden administration must keep small businesses a priority as they plan future policy legislation.”
Supply Chain Disruptions Taking A Toll On Small Businesses
The Wall Street Journal (4/21, Simon, Sebastian, Subscription Publication) reported supply chain disruptions are causing problems for small companies, which are unable to absorb or push back against price increases from suppliers and are less able to pass additional costs on to consumers. According to a survey of roughly 800 companies by business advisory firm Vistage Worldwide Inc., 42% of small businesses reported temporary shortages or other supply chain issues in March.
SBA Administrator Argues Infrastructure Plan Would Help Small Businesses Small Business Marketing
The Washington Examiner (4/21) reported, “The Biden administration has argued that its more than $2 trillion infrastructure plan has plenty to offer the nation’s 30 million small businesses.” SBA Administrator Isabella Casillas Guzman said in a call with business leaders organized by the White House this month, “The Made in America tax plan will help level the playing field between small businesses and large multinational corporations by ensuring that big corporations can’t escape or eliminate the taxes they owe by offshoring jobs and profits in the United States and pay a lower tax rate than small businesses.”
Commodity Prices Surge, Signaling Economic Rebound Has Roots
CNBC (4/22, Lahiff) reported that commodity prices are “surging” in 2021, with futures “for lean hogs, corn, crude oil, gasoline and lumber” spiking this year, a “sign that investors see the economic rebound as having roots.” Joule Financial President Quint Tatro cautioned stock market investors to pay attention to signals the commodity market is sending, and the need to be selective in the companies they invest in.
Powell Says Another Surge In COVID Cases Would Pose Biggest Risk To Strong Economy This Year
USA Today (4/14, Davidson) reported in an interview with the Economic Club of Washington Wednesday, Federal Reserve Chairman Powell said another surge in COVID cases poses the greatest threat to the central bank’s forecast for an economic boom this year. Powell said, “The main risk is that we’ll have another spike in cases.” USA Today says a surge in cases could “force states to reinstate business restrictions and discourage Americans from dining out, visiting stores and traveling in growing numbers.” But Powell “generally appeared confident the nation will avoid that outcome and is on the verge of roaring growth.” Powell said, “I think we’re going into a period of faster growth and high job creation.”
Powell Says US Will Taper Bond Purchases Before Considering Rate Increases. Bloomberg (4/14, Saraiva, Torres) reported Powell said the Fed will likely reduce its bond purchases before it considers raising interest rates. Powell said, “We will reach the time at which we will taper asset purchases when we’ve made substantial further progress toward our goals from last December, when we announced that guidance. ... That would in all likelihood be before – well before – the time we consider raising interest rates. We haven’t voted on that order but that is the sense of the guidance.”
Labor Department: Almost Every State Saw Increased Hiring During March
The Wall Street Journal (4/16, Dougherty, Morath, Subscription Publication) reported the Labor Department on Friday announced that hiring rose in 49 states during March. The Journal added that leisure and hospitality employers sped up hiring throughout the nation, which enabled a number of the hardest-impacted states to experience robust job growth.
A Washington Post (4/16, O'Connell) analysis said business is recovering rapidly throughout the nation “at hotels, restaurants and airlines, but millions of employees have been left behind as companies seek to lock in pandemic changes to their models and slash labor costs in the future.” The Post added that there were “13.8 million people employed in leisure and hospitality jobs this March, according to the Bureau of Labor Statistics.” However, that figure is still three million less than the total corresponding to where the sector had been prior to “the pandemic, and it remains to be seen how many of the industry’s still out-of-work employees will get a call back with business and international travel to the United States still nearly nonexistent.”
Waller Does Not See Increase In Inflation Lasting
The New York Times (4/16, Smialek) reported Christopher Waller, the newest Federal Reserve governor, on Friday indicated “that he expects an unfolding acceleration in inflation – which is expected to intensify in the coming months – will prove short-lived.” During an interview, Waller told CNBC, “I do buy into the idea that this is going to be temporary,” adding, “Whatever temporary surge in inflation we see right now is not going to last.”
Mastercard, BOB Financial Launch SME Focussed ConQR Credit Card
Moneycontrol (IND) (4/22) reported, “BOB Financial and Mastercard have jointly launched small business-focussed QR code embedded credit card that will not only enable the cardholders to make payments but receive them as well.” Under the program “small businesses can use QR to make payments, while also enjoying the ability to receive payments.”
How Debit Rewards Can Create Customer Loyalty Wages and Benefits
PYMNTS (4/23) reported on debit rewards programs, noting that the draw could “be compounded for merchants as more consumers begin to use mobile or digital wallets to make payments more frequently. Digital wallets are becoming a more popular way to pay for eCommerce as well as in-store purchases, with recent PYMNTS data finding that 42 percent of bridge millennials — those between 33 and 43 years old — use these tools to pay online.”
Amazon’s Third-Party Sellers Say Attacks From Other Sellers Are Rampant
Insider (4/14, Cain) reported that for small businesses, “selling products on Amazon offers a tantalizing opportunity. Some third-party sellers have become such cash cows that investment firms like Thrasio have raised hundreds of millions of dollars to buy up lucrative brands.” However, “sellers said there was a dark side to that e-commerce gold rush: a relentless onslaught of attacks from other sellers, all jockeying for position on Amazon’s digital storefront.”
Dell Updates Cloud Data Protection Portfolio
ZDNet (4/6, Condon) reported last week Dell Technologies “announced it’s updating its cloud data protection portfolio with a new backup service, as well as expanded services for Google Cloud and AWS customers.” The Dell EMC PowerProtect Backup Service “offers cloud-based data protection powered by Druva,” and is “designed to cover SaaS applications without increasing IT complexity.” The “PowerProtect Backup Service can also protect data on endpoint devices, such as desktops and laptops,” in addition to providing “eDiscovery, data security and compliance capabilities.” Dell “noted that many popular SaaS applications – like Microsoft 365, Google Workspace and Salesforce – don’t provide native data protection services.”
Broadcom Moves SaaS Offerings To Google Cloud
CRN (4/13, Goodison) reported, “Broadcom is moving its cloud-based security and enterprise operations software to Google Cloud and will leverage Google’s data cloud capabilities for its business-wide data and analytics strategy.” Broadcom “is migrating its software-as-a-service offerings from its own on-premises servers and Amazon Web Services (AWS).” Rob Greer, VP and GM of Broadcom’s Network and Information Security Software Division, commented, “Thanks to moving to Google, we don’t need to worry about that level of technology, management and integration anymore. The majority of the value here is on customer-facing, 24-by-seven-by-365, global workloads that need to be available and performant for our customers, and most of those will be moved over this calendar year.”
Lease-To-Own A Viable Alternative To POS Lending
Payments Source (4/9, Heun) reported that as lending options “are going to play a significant role in how consumers take part in a post-pandemic economic recovery,” lease-to-own offerings can provide “immediate lease payment options for those with limited or no credit history.” Crone Consulting CEO Richard Crone said, “For any retailer,” greater transaction rates are “the whole reason for complicating the payments mix or acceptance basket, as you are trying to close a sale that you might not have without another payment type offered. ... Lease-to-own is an interesting concept and what makes it fly is you have both sides of a two-party market. ... First, you have merchant acceptance, but second is a willingness on the part of consumers to sign up for this option instantly.”
Enhanced Unemployment Benefits Seen As Making Hiring Difficult
The Wall Street Journal (4/23, Melchior, Subscription Publication) reported that entrepreneurs are having difficulty hiring workers hard to find, either out of pandemic-related health concerns, difficulty balancing full-time work with childcare due to shuttered schools, or disincentives brought on by enhanced unemployment benefits. An NFIB survey of over 500 small businesses “reported last week that 42% of them had job openings they couldn’t fill.” NFIB research executive director Holly Wade was quoted saying, “As long as we’ve been conducting the survey, it’s never been that high.”
Unemployment Benefits Blamed For Labor Shortage. Insider (4/21, Taylor) reported US businesses are placing the blame for staffing woes with the stimulus package, saying it incentivized potential hires to remain unemployed through a combination of federal and state unemployment benefits. “The biggest challenge out there is the federal government and the state government are going to continue with this unemployment,” said 60-unit McDonald’s franchisee Blake Casper, one of many operators to test cash sign-on bonuses as incentives for new hires. “John Motta, a Dunkin’ franchisee who serves as chairman of the Coalition of Franchisee Association, said the math just doesn’t add up for many people deciding between unemployment benefits and working at a fast-food chain.”
Democrats Pushing For Permanent Changes To Jobless Benefits In Antipoverty Package
The Wall Street Journal (4/23, Duehren, Restuccia, Subscription Publication) reported on how a number of Congressional Democrats are pressing for the inclusion of permanent changes to unemployment benefits in an antipoverty package the President is expected to introduce, with the changes entailing more and generous and lengthier benefits.
Nearly 700K People Received Extra Stimulus Payments This Week
The Detroit Free Press (4/22, Tompor) reported, “people who already received the third stimulus payment were shocked to receive extra money in recent days. Nearly 700,000 supplemental payments this week went to people who earlier this year received a stimulus payment based on their 2019 tax returns.” They “received extra money, either a new or larger payment, after their 2020 income tax returns were processed by the IRS.” The Free Press says the “‘plus-up’ payments in the most recent batch had a value of nearly $1.2 billion.”
Jobless Claims Fall To Lowest Level Since Pandemic Began
The New York Times (4/15, Ember) reported initial jobless claims “fell last week to their lowest level of the pandemic.” The Labor Department said Thursday that “about 613,000 people filed first-time claims for state unemployment benefits last week,” marking “a decrease of 153,000 from the previous week. In addition, 132,000 filed for Pandemic Unemployment Assistance, a federal program that covers freelancers, part-timers and others who do not routinely qualify for state benefits. That was a decline of 20,000 from the previous week.”
Gig Economy Means Retailers Are Competing Even More For Labor
Quartz (4/16, Cheng) reported, “US retailers have long been competing with one another for workers in a high-turnover industry.” Recently, the gig economy has joined “the competition for labor, and increasingly so over the course of the pandemic.” As a result, the “scramble for labor has been testing even the largest retail chains, which are responding with better pay and schedules.” In February 2021, “Costco announced increasing its minimum wage to $16 an hour, pulling ahead of rivals like Amazon, Target, and Best Buy.” Meanwhile, “Walmart announced on April 14 that it will convert thousands of its part-time workers into full-time employees, a move that will give workers more consistent hours, while also giving Walmart more stability in staffing as its pickup and delivery business explodes.”
Initial Unemployment Claims Rose To 774K Last Week
The AP (4/8, Wiseman) reported the Labor Department revealed on Thursday that “the number of Americans applying for unemployment benefits rose last week to 744,000,” an increase of 16,000 from the week earlier. The AP added, “For the week ending March 27, more than 3.7 million people were receiving traditional state unemployment benefits,” and “if you include supplemental federal programs that were established last year to help the unemployed endure the health crisis, a total of 18.2 million are receiving some form of jobless aid the week of March 20.”
CNBC (4/8, Cox) reported on its website that 744,000 is “well above the expectation for 694,000 from economists surveyed by Dow Jones,” but Reuters (4/8, Mutikani) said “the increase likely understated the rapidly improving labor market conditions as more parts of the economy reopen and fiscal stimulus kicks in.”