NFIB Weekly News
Leading the News
Gingrich Leading Small Businesses In Tax Reform Campaign.
The Hill (7/23, Solomon) reported that “U.S. small-business owners are launching a nationwide blitz with former House Speaker Newt Gingrich to pressure Congress to pivot to tax relief.” The Hill added that “the group is armed with a survey showing that small-business owners want tax relief more urgently than a repeal of ObamaCare, so that they can reinvest in their companies or pay down debt.” The article also stated that Gingrich has met with House Speaker Paul Ryan as well as “White House aides and two dozen chief of staffs for U.S. senators.” Meanwhile, Reuters (7/20) reported that Ryan, speaking at a factory in Massachusetts, said that “tax reform talks are nearing a consensus to lower business taxes by closing loopholes and special interest deductions.” Tax Analysts (7/21) quoted Ryan saying, “We’ve got to get these tax rates down. We’re going to create a new lower tax rate specifically for manufacturers, for small businesses, for companies like this, for businesses across America, so they can actually compete.”
Fed Watching Inflation, Forecasters Say. Business Climate
MarketWatch (7/13, Nutting) reported that “inflation is too low now, but it could become troublesome if the unemployment rate continues to fall.” The article added that “the Federal Reserve can’t be certain about when inflation will begin to heat up, but the central bank is pretty sure that it will start bubbling up if the unemployment rate continues to fall, said master forecaster Jim O’Sullivan, the chief U.S. economist for High Frequency Economics.” The article also pointed out that “plenty of people – including Fed policy makers such as Lael Brainard, Neel Kashkari and Rob Kaplan – say the Fed should keep interest rates low as long as inflation is below target. In theory, low rates would allow the labor market to tighten even further, perhaps luring back some of the millions of working-age adults who have dropped out of the labor force since the Great Recession.” It added that “the Fed’s worry is that it may have to raise rates abruptly to quench the embers of inflation if the economy gets too hot.”
Small Business Optimism Waning As Congress Fails To Act On Healthcare.
The NFIB reported that its latest Index of Small Business Optimism results show that US small business owners’ optimism waned in June due to Congressional inaction on healthcare reform. The index declined 0.9 points to 103.6. NFIB President and CEO Juanita Duggan said, “Small business optimism dropped in response to the gridlock in the Senate over the healthcare reform bill.” She added, “This happened in March, when optimism dipped after the House initially failed to repeal Obamacare. I hope every senator is paying attention, because small business owners are paying attention to them.” NFIB Chief Economist Bill Dunkelberg added, “The Index remains at a historically high level, but within the Index there are signs of trouble that should be a concern. Fewer business owners expect business conditions to improve, and fewer expect sales to improve.” The NFIB also reported that there was a decrease in job openings and job creation plans.
Small Businesses “Hungry For Tax Reform.”
CNBC (6/22) reported that “taxes have long ranked as a top issue for America’s small businesses, many of whom file as pass-through entities, combining business and personal income and, as a result, sometimes paying a higher effective rate.” CNBC added, “In the National Federation of Independent Business’ 2016 ‘Small Business Problems and Priorities’ study, federal taxes on business income ranked as the No. 3 issue behind the cost of health insurance and unreasonable government regulations.” In addition, the article stated that “the first-ever CNBC/SurveyMonkey Small Business Survey in June found that taxes were the No. 1 issue for 25 percent of the more than 2,000 businesses surveyed.” CNBC wrote that “House Speaker Paul Ryan also spoke out in favor of overhauling the tax code this week at the National Association of Manufacturers Summit Tuesday, pointing out the uneven playing field small businesses that file as pass-through entities find themselves on, compared to their corporate counterparts.”
Rate Hike Shows Fed Sees Stronger Economy.
Media reports cast the Federal Reserve’s decision to raise interest rates as a good sign for the economy. The Los Angeles Times (6/14, Puzzanghera, Lee) reported that “Federal Reserve policymakers” implemented “their third small hike in a key interest rate in six months, a move that will push it above 1% for the first time since the 2008 financial crisis.” It was “another validation of the recovery from the Great Recession.” The Wall Street Journal (6/14, Timiraos, Subscription Publication) ran a similar analysis of the Fed’s motives, and the New York Post (6/14, Dugan) reported the Fed made its decision “as unemployment in the US has continued to fall and consumer confidence has risen.” Likewise, Business Insider (6/14, Oyedele) said the Fed was “signaling that it believes the economy is healthy enough to withstand tighter financial conditions,” Reuters (6/14, Dunsmuir, Schneider) that it cited “continued US economic growth and job market strength,” the New York Times (6/14, A1, Appelbaum, Subscription Publication) that it demonstrated “confidence in the health of the American economy,” and the Washington Post (6/14, Swanson) that it sent “a message of confidence in the strengthening of the US economy.” The Post adds that the Fed also “laid out plans to begin rolling back the more than $4 trillion balance sheet it accumulated in an effort to prop up the economy after the financial crisis.”
Small Business Optimism Remains Strong, But Hiring Qualified Workers Still A Challenge.
The NFIB reported that its May 2017 Index of Small Business Optimism remained at its April level of 104.5, meaning the index has now seen six months of historically-high optimism readings from US small business owners. NFIB President and CEO Juanita Duggan said, “The remarkable surge in optimism that began last year right after the election shows no signs of slowing down. Small business owners are highly encouraged by the President’s regulatory reform agenda, and they remain optimistic there will be tax reform and health-care reform. This is a policy-driven phenomenon.” For the May report, a majority of small business owners, 59%, reported hiring or attempting to hire workers. However, 51% indicated they had difficulty finding qualified workers. NFIB Chief Economist Bill Dunkelberg noted, “The tight labor market has been a persistent problem for small business owners for the past several months, and the problem appears to be getting worse.” He added, “It’s forcing small business owners to increase compensation, which we’re seeing in this data, to attract new workers and keep the ones they have.”
US Leading Economic Index “Surged” In June.
MarketWatch (7/20) reported that “a broad measure of how well the U.S. economy is performing surged in June after a strong gain in May, suggesting growth could speed up in the months ahead.” The article added that “the leading economic index jumped 0.6% last month.”
Trump Administration Outlines Plans To Eliminate Hundreds Of Regulations. Small Business Marketing
The Washington Post (7/20, Eilperin, Paletta) reported that OMB on Thursday described “how it would jettison hundreds of existing or planned regulations as part of its larger push to ease federal restrictions on the private sector.” The agency issued a list that “shows the extent to which this administration is determined to erase many of the Obama administration’s policy priorities.” In all, the Administration “said it was pulling or suspending 860 pending regulations” including 469 that “were being completely withdrawn” and 391 that were “being set aside or reevaluated.”
The Washington Times (7/20, Boyer) reports that OMB Director Mulvaney “accused the Obama administration...of keeping a ‘secret list’ of proposed regulations during Mr. Obama’s eight-year regulatory onslaught against businesses.” According to Mulvaney, 179 of the “860 rules or proposed rules that the Trump administration has killed...came from what he called Mr. Obama’s ‘secret’ list.” Mulvaney said, “They had a bunch of things that they wanted to regulate. ... They just didn’t want to tell you about it. They thought it would be bad for their re-election prospects in 2012, so they created a secret list of regs that were not disclosed to you folks. We are disclosing it.”
Fed Concerned That Persistent Low Inflation Is Potential Problem.
The New York Times (7/24, Appelbaum, Subscription Publication) reports that a recent decline in inflation “is perplexing to Federal Reserve officials who are now wrapping up the central bank’s stimulus campaign.” The Times adds that “the Federal Reserve thinks modest inflation has important economic benefits, and it has aimed since 2012 to keep prices rising at an annual pace of 2 percent,” but despite its efforts “inflation has been stubbornly sluggish.” The article explains that “a little inflation can brighten the economic mood, causing wages and corporate profits to rise more quickly.” The Times also writes that “the Fed’s chairwoman, Janet L. Yellen, told Congress this month that she expects inflation to rebound,” however, “she said the Fed could change course if weakness persists, by, for example, not moving forward with additional interest rate increases.”
WTimes’ “Legislative Activity Index”: Congress “Passing Bills” At Steady Pace.
The Washington Times (7/12, Dinan) reported that its “Legislative Activity Index” is showing “a newly unified government in Washington passing bills at a clip not seen since the early days of the Obama administration.” The Times said the House “has led the way, notching a legislative record that puts it in the top 25 percent of sessions of Congress dating back to just after World War II.” However, “the Senate continues to lag, with lawmakers in the upper chamber ranking near the bottom of the past 71 sessions of Congress when it comes to the number of bills cleared by the chamber, volume of floor activity and – perhaps most striking – the slow pace of confirmations. On that last measure, it’s the second-worst start to a year on record and by far the worst start to a presidential term.”
NYTimes Analysis: Yellen “Carefully Conciliatory” On Regulatory Concerns At Senate Hearing.
Though the stated purpose of Federal Reserve Chair Janet Yellen’s testimony before the Senate Banking Committee last week was monetary policy, the New York Times (7/13, Appelbaum, Subscription Publication) reported that the session “was devoted mostly to regulatory issues,” which is indicative of lawmakers’ confidence in the strength of the American economy. In response to Democrats’ request that she affirm the importance of regulations imposed on financial institutions since the 2008 crisis, Yellen “made it clear that she was proud of her work.” Still, she was “carefully conciliatory,” agreeing to a certain extent with Republicans’ insistence that some rules might be too strict and expressing a willingness to consider changes. Yellen also reaffirmed her support for deregulating community banks, an issue with bipartisan support.
Mulvaney Outlines Plan For Three Percent Economic Growth.
OMB Director Mick Mulvaney, in a Wall Street Journal (7/12, Subscription Publication) op-ed titled “Introducing MAGAnomics,” outlined the Trump Administration’s plans to achieve sustained three percent economic growth. Mulvaney argued that a combination of tax reform, welfare reform, spending reductions, deregulation, and infrastructure projects will yield a GDP that is $16 trillion larger over the next decade.
Analysis Finds More Emails Opened On Mobile Devices, And Most On iOS.
MediaPost’s Email Marketing Daily (7/21, Nelson) reported that the email-and-data provider Return Path found in an analysis of some 27 billion emails opened in the year ending in April that 55% “were opened on a mobile device – an increase from 29% identified in a similar study in 2012,” while “almost 80% of mobile email opens” in the latest period were “on iOS, quadruple the number of mobile opens on Android devices.”
Google Unrolls Search Results That Look “A Lot Like A News Feed.” Wages and Benefits
Several media outlets report on the very careful, controlled release by Google this week of something that looks very much like a news feed, or, as Wired (7/19, Pierce) reported, “another way to display search results.” The results, however, reflect that “Google’s taking everything it’s learned about you and the world from all that searching, and using that data to create a feed of stuff you might be interested in.” Wired said the “infinitely scrolling list of stuff Google thinks you might be interested in” will include “news headlines, blog posts, 12 Foods You Can Feed Your Dog listicles, and more, along with sports scores, movie trailers, and the like. It’s like what Google Reader might have evolved to become in 2017, if Google hadn’t murdered Google Reader in 2013.”
Influencer Marketing Gains Traction Over Traditional, Hard-To-Measure Tactics.
Fortune (7/13, Noyan) reported that new firms are “transforming the advertising industry” through influencer marketing, which is “gaining popularity among brands who would rather not shell out for the relatively inefficient and hard-to-measure traditional advertising tactics.” The report pointed out that influencer marketing isn’t affected by ad blocking, and it can “be highly targeted.”
Google Says It Won’t Allow Pop-Up, Pop-Under Formats With AdSense.
MediaPost’s Digital News Daily (7/12, Rosenstein) reported that Google said in one of its blogs that it would no longer allow publishers that use its AdSense system to “serve pop-up or pop-under ad formats” and that it also would “not permit Google ads on any site that contains or triggers pop-unders, regardless of whether Google ads are shown in the pop-unders.” Google has been emphasizing “a good user experience” in some types of ad restrictions it has announced this year.
Facebook Seeking Additional Sources Of Ad Growth.
Recode (7/15, Wagner) reported on Facebook’s limits on growth from ad revenue, partly because users’ News Feeds are “all maxed out” on ads and partly because much of China remains off-limits to the company. As a result, Recode said, Facebook is experimenting with putting ads anywhere and everywhere. Some of the experiments include “mid-roll video ads,” “paying video publishers to make TV shows for Facebook, a chance for more video ad inventory,” and “selling ads inside Instagram Stories” and on its Messenger app. Recode said Facebook hopes “at least one of these new formats can hit big.”
DMA Finds Email Still Has Best ROI, Lowest CPA.
MediaPost’s Email Marketing Daily (7/6, Nelson) reported that the Data & Marketing Association (DMA) said in its latest report on response rates that “email marketing remains the best digital marketing channel for return on investment.” In addition, the format’s cost-per-acquisition (CPA) was “the lowest of all media types” the DMA evaluated, coming in at $10.32. Online display ads, meanwhile, “had the lowest return on investment.”
Labor Department: Weekly Jobless Claims Fall To Lowest Level In Nearly 5 Months.
Reuters (7/20, Mutikani) reported that “the number of Americans filing for unemployment benefits fell more than expected last week, touching its lowest level in nearly five months, suggesting strong job gains that should continue to underpin economic growth.” The article stated that “initial claims for state unemployment benefits dropped 15,000 to a seasonally adjusted 233,000 for the week ended July 15, the Labor Department said,” which was “the lowest level since February.” The article also added that the data beat expectations, as “economists polled by Reuters had forecast claims falling to 245,000.”
BLS Report: US Added 222,000 Jobs In June, Surpassing Expectations.
Fox Business (7/7, Rocco) reported that “the U.S. economy added 222,000 jobs in June to surpass expectations, keeping the Federal Reserve on course as it steadily raises interest rates.” Fox Business wrote that the “latest jobs report from the Bureau of Labor Statistics (BLS) offered some positive signs” as the gains reported “beat economists’ forecast for 179,000.” NBC News (7/7) reported that the BLS “also adjusted the figures for April (from 174,000 to 207,000) and May (from 138,000 to 152,000).” MarketWatch (7/7, Bartash) wrote that “hiring signs are everywhere these days,” and added that “the increase in new jobs was the largest in four months and second biggest haul of the year.”
Job Numbers Up, But Wage Growth Lags. Bloomberg News (7/7, Laya) reported that “wages were below forecasts, even with the jobless rate close to the lowest since 2001.” However, Bloomberg News added, “sustained hiring in June is evidence of the kind of labor-market resiliency that could eventually lead to a stronger acceleration in wages.”
NBC Analysis: Low Unemployment, Skills Gap Contribute To Labor Shortage.
In a “story of the giant ‘help wanted’ sign hanging over America,” NBC Nightly News (6/25, story 7, 2:25, Snow) cited a Bureau of Labor Statistics report that the US has a record six million jobs open, as employers are struggling to find qualified workers. NBC’s Stephanie Ruhle said that “the rate of increase in job openings [is] far outpacing the increase in actual hires. Many employers point to a skills gap in the labor force, a mismatch between the jobs they’re trying to fill and the workers needed to fill them.” However, others say employers are to blame, as wage growth has stagnated since 2009. Ruhle noted the executive order President Trump signed earlier this month to expand apprenticeship programs, but, she added, in some places “the help can’t come soon enough.”
Trump Signs Executive Order On Apprenticeships.
The Hill (6/15, Fabian) reported that President Trump signed an executive order “designed to expand apprenticeships to train people for millions of unfilled jobs,” and added that the order “directs the Labor Department to draft new rules allowing companies, industry groups and unions to create and certify their own programs, which would then be approved by the department.” MarketWatch (6/15, Schroeder) reported that the order “will double federal spending on apprenticeships to about $200 million annually.” The AP (6/15, Kellman) reported that “the money would come from existing job training programs.” The AP added, “Trump is directing the government to review and streamline some 43 workforce programs across 13 agencies.” USA Today (6/15, Swartz) reported that “a lack of skilled workers has created a hiring gap across several industries.”
Columns Tout Trump Apprenticeship Plan. In a column for The Hill (6/18), Urban Institute Fellow Robert Lerman wrote that “President Trump’s ringing call for expanding apprenticeship...should be welcome to all who favor a cost-effective approach to upgrading skills, raising job quality and widening routes to rewarding careers.” In a column for Fortune (6/18) Institute for Workplace Skills and Innovation CEO Nicholas Wyman wrote that President Trump’s new apprenticeships initiative “is cause for optimism that he will significantly improve the number and quality of apprenticeships in the economy.”
Labor Department Moves To Reverse Obama-Era “Persuader Rule.”
The Washington Post (6/9, Eilperin) reported the Labor Department announced that it would reverse the “persuader rule,” which would have required companies to “disclose their initial contacts with outside consultants on how to respond to unionizing efforts.” The Post said the reversal “marks a victory for business groups and a setback for organized labor and underscores the extent to which the department is starting to shift course under its new secretary, Alexander Acosta.” The Post added, “The regulation, which was finalized in March 2016, would require companies to report any ‘actions, conduct or communications’ they’ve pursued to ‘affect an employee’s decisions regarding his or her representation or collective bargaining rights.’”
Labor Department Rescinds Obama-Era Rule On “Joint Employment.”
Reuters (6/7, Wiessner) reported that the Labor Department announced it was “rescinding the Obama administration’s standard for determining when companies are ‘joint employers’ of contract and franchise workers.” In a statement, the department “said it had withdrawn a 2016 interpretation of the federal Fair Labor Standards Act (FLSA) that expanded the circumstances under which a business could be held liable for wage-law violations by staffing agencies, contractors, and franchisees.” Business groups “praised” the decision.
The Los Angeles Times (6/7, Kitroeff) reported that the Labor Department “also rescinded guidance stating that companies often deprive workers of protections by classifying them as independent contractors when they are actually employees.”