NFIB Weekly News
Leading the News
Buttigieg Says Supply Chain Disruptions Could Continue Into Next Year
The Hill (10/17, Choi) reported that on CNN’s State Of The Union Sunday, Transportation Secretary Buttigieg “said supply chain issues could continue into next year as many companies struggle with disruptions.” Noting “that Moody’s recently warned that supply chain issues would ‘get worse before they get better,’” host Jake Tapper “asked Buttigieg whether he agreed with that notion and if Americans should prepare for such an outcome.” Buttigieg said, “Well, certainly, a lot of the challenges that we have been experiencing this year will continue into next year. ... But there are both short-term and long-term steps that we can take to do something about it. Look, part of what’s happening isn’t just the supply side. It’s the demand side. Demand is off the charts. Retail sales are through the roof.”
Consumer Inflation Continued Sharp Increase In September Business Climate
Bloomberg (10/13, Pickert) reported that “prices paid by U.S. consumers rose in September by more than forecast, resuming a faster pace of growth and underscoring the persistence of inflationary pressures in the economy.” CNBC (10/13, Cox) reported the Department of Labor’s Consumer Price Index “rose 0.4% for the month, compared with the 0.3% Dow Jones estimate.” CNBC added that “on a year-over-year basis, prices increased 5.4% versus the estimate for 5.3% and the highest since January 1991.” CNBC added, “Gasoline prices rose another 1.2% for the month, bringing the annual increase to 42.1%. Fuel oil shot up 3.9%, for a 42.6% year over year surge.” The AP (10/13, Rugaber) reported the core CPI, which excludes volatile food and energy prices, rose 0.2 percent in September and were up 4 percent over the previous year.
The Wall Street Journal (10/13, Guilford, Subscription Publication) reported that according to the National Federation of Independent Business, about 46 percent of small businesses said in September they planned to raise prices in the next three months overall, the most since monthly records began in 1986.
Record Share Of Small Business Owners Report Difficulty Filling Positions
Bloomberg (10/12, Pickert) reported, “A record share of small-businesses owners – 51% – said they had vacant positions they could not fill in September, according to data from the National Federation of Independent Business. A record 42% of small firms said they raised compensation, and nearly a third indicated they plan to do so in the next three months.”
NBC News (10/12, White) reported that according to NFIB Research Center Executive Director Holly Wade, “It’s an incredibly difficult time for those who have open positions to find and attract applicants. ... For many of them, they’re not receiving any applications — there are just no résumés coming in right now.” NBC News added, “despite the contraction in job openings, Wade said, the labor shortage remains a cloud hanging over economic recovery. ‘I don’t see that this issue eases any time soon...Small-business owners are planning to have to deal with this well into 2022.’”
Marketplace (10/12, Ryssdal) reported, “There’s a lot of competition for workers, said Holly Wade...because 5 million people still haven’t returned to the labor force.” Wade is quoted saying, “It’s still working out child care disruption issues, school disruption issues, and also for those navigating what their next job that will be.”
Facebook Faulted For Not Communicating With Small Business Owners After Outage
TIME (10/7, Bruner) reported Instagram and Facebook “are home to countless small businesses, whose owners...depend on it for their income.” The Facebook server outage last week “could have been catastrophic for any of them, not just because of the loss of traffic, but because they don’t have access to their customers outside of the apps.” Small business owners now are “faced with the knowledge that something as esoteric as a router configuration update – entirely out of their control – can derail their livelihoods.” But what is “perhaps even more alarming: None of the entrepreneurs or accounts contacted by TIME, ranging in size from several hundred thousand to several million followers, received any kind of direct communication from Instagram or Facebook to explain the situation, share updates, or assuage concerns.”
NFIB Executives Speak Out Against Tax Increase Proposals
School For Startups Radio (10/5) featured NFIB President Brad Close, who argued that new tax proposals would undermine small businesses’ ability to offer competitive compensation, in an environment where finding qualified workers remained their biggest problem. Close said, “Right now [Washington D.C. is] trying to decide how they can raise most Americans’ taxes to pay for a huge expansion of government, so we’re doing everything we can to make sure that doesn’t happen…There are plenty of things in this bill that should have most small businesses really worried…There’s a new 3.8% tax…on pass throughs, they’re increasing some rates – capital gains rates. They want to lower the death tax threshold to make sure more small businesses fall under it.”
Small Business Optimism Decreased, Uncertainty Increased In September
The NFIB Small Business Optimism Index decreased by one point to 99.1 in September. Of the ten Index components, three improved, five declined, and two were unchanged. The NFIB Uncertainty Index increased to 74, a five-point increase, while the proportions of small business owners reporting job openings that could not be filled and increased compensation both hit record highs. NFIB Chief Economist Bill Dunkelberg was quoted saying, “Small business owners are doing their best to meet the needs of customers, but are unable to hire workers or receive the needed supplies and inventories. ... The outlook for economic policy is not encouraging to owners, as lawmakers shift to talks about tax increases and additional regulations.”
Guide Details What To Do If You Are Denied PPP Forgiveness
Small Business Trends (10/14, Price) released a guide on “what to do if you are denied PPP loan forgiveness.” According to Small Business Trends, the Small Business Administration (SBA) “continues to forgive Paycheck Protection Program [PPP] loans at a steady clip,” with the agency “making payments on 6.76 million applications so far.” However, “while the vast majority of loans are forgiven for all or nearly all of the loan amount, some are still denied forgiveness by the SBA.”
Summers Is “More Alarmed” By “Widespread” Inflation Small Business Marketing
Bloomberg (10/15, Kennedy) reported former Treasury Secretary Larry Summers is “urg[ing] a faster wind-down of the Federal Reserve’s $120 billion a month bond-buying program, given evidence of persistently high inflation. ‘We see inflation becoming more widespread in a wider range of products, spreading to the housing and labor markets,’ Summers told Bloomberg Television’s ‘Wall Street Week’ with David Westin.” Summers added, “I’ve been alarmed for a long time and I’m more alarmed now.” The Wall Street Journal (10/15, Hannon, Dube, Yifan Xie, Subscription Publication) reported inflation is rising globally, but so far the Federal Reserve and the European Central Bank have not raised interest rates, unlike some other central banks.
SBA Administrator Discusses EIDL Changes And Streamlining
The Chicago Business Journal (10/13) reported the SBA “continues to look at ways to make its Economic Injury Disaster Loan application process easier,” according to “remarks came Wednesday during the Society for Advancing Business Editing and Writing conference” from SBA Administrator Isabel Casillas Guzman, who “weigh[ed] in on the agency’s Covid-19 disaster relief programs, problems facing small business owners and the administration’s efforts to tackle those issues.” The Administrator “pointed to changes the SBA made to the loans, including expanding how the proceeds can be used, and how the SBA cleared a backlog of loan applications over the summer,” and also “stressed the SBA had recently raised the limit on those loans from $500,000 to $2 million.” Even so, she said, “The SBA wants to continue to streamline and continue to make the loans more accessible. We are looking at further ways to improve the process.”
Small Businesses Attempt To Navigate Changing Rules Amid Surge In New COVID-19 Cases
The AP (10/10, Anderson) reported for a short time “this summer, it seemed like small businesses might be getting a break from the relentless onslaught of the pandemic. More Americans, many of them vaccinated, flocked to restaurants and stores without needing to mask up or socially distance.” However, in the wake of new COVID-19 cases mainly “due to the delta variant,” there was “a push for vaccine mandates and a reluctant return to more COVID-19 precautions. Now, small business owners are left trying to strike a balance between staying safe and getting back to being fully open.”
Rising Energy Prices Spark Concerns Over US Inflation, Economy
The Wall Street Journal (10/10, Mitchell, Subscription Publication) reported the US economy is under threat from high energy prices. Crude oil prices were near a seven-year high, natural gas prices are at a seven-year high, and heating oil is up 68% this year. Meanwhile, average US gasoline prices were above $3 per gallon and coal prices are soaring. Higher energy prices could boost inflation in the coming months, reduce consumer spending, and slow the US recovery, according to economists. Meanwhile, the Wall Street Journal (10/10, Langley, Subscription Publication) reported in another article that investors are monitoring upcoming third-quarter earnings for insights into how inflation is affecting companies.
SBA Payment Deferments Expiring, Giving Small Businesses “Few Options”
Behind a paywall, Bloomberg Law (9/28, Hood, Subscription Publication) reported the payment deferment period on SBA 7(a) loans is set to expire at the end of September. With the pandemic still ongoing and many businesses still not back to full operations, Bloomberg Law said small business owners “will have few options to stop lenders from demanding payments, small-business attorneys say.” In response, the SBA said in a statement to Bloomberg that “it doesn’t foresee any wave of defaults.” the SBA also said “there are currently no specific changes charted” in its payment deferral policy.
SBA Assistant Administrator Explains “How Emprendedoras Are Changing American Small Business”
In a piece for Inc. Magazine (10/15), SBA Assistant Administrator Natalie Madeira Cofield said with Hispanic Heritage Month underway, the SBA was “mindful of the need to elevate underserved communities, which include America’s emprendedoras.” The Office of Women’s Business Ownership (OWBO) was “focused on meeting the needs of these Latina women through advocacy, outreach, education, and support. OWBO’s efforts are particularly relevant as the SBA has delivered $1 trillion to small businesses since the pandemic began, and continued under the watch of Administrator Isabella Casillas Guzman – an emprendedora herself.”
Square, PayPal Face Cost Disclosures For Small Business Loans Wages and Benefits
Bloomberg BNA (10/14) reported, “Soon, merchant cash advance companies as well as prominent fintech lenders like PayPal Inc. and Lending Club Corp. could be required by state authorities to provide far more transparency to small business borrowers.” Regulators in California and New York have “proposed requirements for online lenders to disclose the cost of the financing small business borrowers apply for,” and lawmakers in Connecticut, New Jersey, and North Carolina “have introduced similar legislation.” Some finance providers, including PayPal, Square, and Stripe, “as well as merchant cash advance companies, worry their products could be at a disadvantage – real or perceived – depending on the disclosure metrics states want to put in place.”
SMBs Look For Advantage With Digital Marketplaces
PYMNTS (10/6) reported, “At the beginning of 2021, optimistic prognosticators said the U.S. would be out of the pandemic’s depths by the fall, but with vaccination rates slowed and the delta variant spreading across the country, only 24% of Main Street small and medium-sized businesses (SMBs) say their community is completely back to normal.” Kendrick Wong, co-founder and CEO of retail market intelligence platform Omnilytics, “said that going into the pandemic, a lot of apparel retailers, in particular, were underinvested in eCommerce, which left them scrambling to move online when the physical world shut down.”
JPMorgan Chase Invests In Underserved Communities In South Florida
Potentially behind a paywall, the New York Business Journal (10/4, Garrett) reported, “Miami-based Sunstate Bank will use a multi-million investment from JPMorgan Chase to expand small business lending in underserved communities and finance local affordable housing projects.” JPMorgan Chase “has increased its direct equity investments in Minority Depository Institutions and Community Development Financial Institutions to $100 million and has added 10 new institutions as recipients,” including the bank. The Journal said, “JPMorgan Chase’s latest round of direct equity investments more than doubles the $50 million it originally pledged to invest in MDIs and CDFIs...In total, JPMorgan Chase has pledged to commit $30 billion over the next five years to advancing racial equity and bridging the racial wealth gap.” The Journal explained, “MDIs and CDFIs play a vital role in generating economic growth by providing financial services to underrepresented demographics, particularly communities of color and low-income areas.”
NFIB: Social Media Presence Increasingly Important During The Pandemic
PYMNTS (9/28) reported, “Social commerce sales reached nearly $27 billion last year, according to eMarketer, a 39% year-over-year increase. Sales are expected to surpass $36 billion this year and top $79 billion by 2025. Social commerce is projected to make up 4% of U.S. eCommerce sales in 2021.” PYMNTS reported “that small business owners are shifting to social media to help capture consumers they might otherwise been unable to reach. PYMNTS’ most recent Main Street Business Survivor Study found that the average small store now operates three distinct sales channels — a physical storefront, an online store and a social media marketplace.” NFIB Research Center Executive Director Holly Wade said, “It’s becoming increasingly important during the pandemic, with shifting business operations. Small businesses need social media to make sure they’re competitive with other businesses in the area.”
Facebook Informs Advertisers It Likely Undercounted Web Conversions From iPhones
CNBC (9/22, Feiner) reported Facebook revealed to its advertisers in a blog post last Wednesday that it inaccurately reported ad performance on iPhones, undercounting web conversions due to iOS privacy changes released earlier this year. Facebook “estimated it underreported web conversions on Apple’s iOS by about 15% in the third quarter, noting there’s a ‘broad range’ for different advertisers.” In the post, Facebook Vice President of Product Marketing Graham Mudd said, “We believe that real world conversions, like sales and app installs, are higher than what is being reported for many advertisers.”
As Americans Leave Jobs At “Staggering Rates,” Unions Use Strikes To Benefit Those Who Stay
The Washington Post (10/17, Bogage) reported that while Americans are “leaving their jobs at staggering rates,” many are “choosing to dig in and fight.” The Post said that so far, “there have been strikes against 178 employers this year, according to a tracker by Cornell University’s School of Industrial Labor Relations,” while the Bureau of Labor Statistics, “which records only large work stoppages, has documented 12 strikes involving 1,000 or more workers so far this year. That’s considerably higher than 2020, when the pandemic took hold, but in line with significant strike activity recorded in 2019 and 2018.” In interviews with the Post, workers and labor leaders “said union members are angry with employers for failing to raise pay to match new profits and are disappointed by the lack of high-quality jobs,” and “frustrated that wage growth is not keeping pace with inflation.”
First-Time Jobless Claims Fall To Lowest Level Since March 2020
Bloomberg (10/14, Shah) reported that according to Labor Department data, first-time claims for jobless benefits fell 36,000 last week to 293,000, the “lowest since March 2020, showing employers are hanging onto their workers in a tight labor market.”
Businesses Struggle To Find Seasonal Workers
Adweek (10/4, Lacy) reported that retailers and fast food restaurants are struggling with their seasonal hiring amidst supply chain and labor shortages as the COVID-19 pandemic continues. Industry experts were uncertain if big retailers’ efforts to entice seasonal workers by increasing wages and enforcing vaccine mandates will be effective, with some speculating that government intervention will be required.
First-Time Jobless Claims Down Significantly Last Week
Bloomberg (10/7, Pickert) reported that according to Department of Labor data released Thursday, first-time claims for new jobless benefits fell 38,000 last week to 326,000, “pointing to ongoing improvement in the labor market.” Economists surveyed by Bloomberg had expected claims to come in at 348,000. The AP (10/7, Wiseman) called it “another sign that the U.S. job market and economy continue their steady recovery from last year’s coronavirus recession.” Reuters (10/7, Mutikani) said last week’s decline was the largest since June. Claims “had increased for three straight weeks as California moved people to another program following the expiration of federal government-funded aid on Sept. 6 to maximize their access to unemployment benefits.”
NFIB Part Of Advocacy Group For Pharmacy Benefit Management Reform
Modern Healthcare (9/27, Devereaux, Subscription Publication) reported on the Coalition for PBM Reform, “which seeks to alter the way pharmacy benefit managers operate to better serve patients, pharmacies and businesses.” The organization “stems from a common concern among patient advocates, doctors, pharmacies and small business groups that spread pricing, patient steering, and other PBM practices restrict access to drugs and increase costs.” The coalition includes the National Federation of Independent Business.
Jobless Claims Unexpectedly Rose Last Week
CNBC (9/23, Cox) reported that according to data released by the Department of Labor on Thursday, first-time claims for jobless benefits rose to 351,000 last week from an upwardly-revised 335,000 the prior week. That’s well above the 320,000 expected by economists. The four-week moving average, which irons out week-to-week volatility, dropped 750 last week to 335,750. The AP (9/23, Wiseman) said claims “still remain somewhat elevated: Before the virus tore through the economy in March 2020, they generally numbered about 220,000 a week.”
Reuters (9/23, Mutikani) said the rise “puzzled economists,” and “some pointed a finger at the wildfires in California, while others blamed Hurricane Ida, which devastated U.S. offshore energy production in late August. There was little conviction that ongoing COVID-19 infections, driven by the highly contagious Delta variant of the coronavirus, were a factor.”