NFIB Weekly News 12

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NFIB Weekly News Leading the News

NFIB Chief Economist: Re-Open The Private Sector To Keep Recovery Going (06/29/2021)

NFIB Chief Economist William Dunkelberg wrote in Forbes (6/21) that economic growth was “stunning” in the first quarter of 2021, yet “was held back by shortages of microchips, houses, and labor just to name a few items.” Dunkelberg said, “Growth rates in states that have re-opened more quickly are substantially better than in states that have re-opened less, and unemployment rates are lower as well,” and concluded, “re-opening the private sector is probably the best recovery policy that government can undertake.”

Business Climate

May Consumer Spending Stagnant As Inflation Climbs (06/29/2021)

The AP (6/25, Crutsinger) reported, “Consumer spending was flat in May with incomes dropping for a second month as the impact of the government’s pandemic stimulus payments waned.” There was, though, a considerable increase in inflation with prices not counting food and energy rising by the biggest magnitude in almost 30 years. The consumer spending reading “represented a marked slowdown following gains of 0.9% in April and a 5% surge in March, the Commerce Department reported Friday.” However, while incomes declined by 2%, wages and salaries rose 0.8%, “reflecting rising employment levels.” The AP adds, “Inflation tied to a gauge of consumer spending that is closely watched by the Federal Reserve increased 0.4% in May and is up 3.9% over the past 12 months.” That marked the biggest 12-month rise since 2008. Meanwhile, core inflation, which doesn’t account for food and energy prices, climbed .5% during May “and is up 3.4% over the past 12 months, the biggest jump since 1991.” Reuters (6/25) says, “There was, however, some good news on inflation. Consumers this month perceived higher inflation to be temporary, a survey showed on Friday.”

Small Business Marketing

Goldman Sachs Coalition Pushing For Expanded Small Businesses Access To Federal Contracts (06/29/2021)

The Hill (6/25, Evers-Hillstrom) reported last Friday, “A business coalition led by Goldman Sachs, the Bipartisan Policy Center and Center Forward is pushing lawmakers to help small businesses access federal government contracts.” The Hill said over the past decade, “the number of small businesses contracting with the federal government shrank by 38 percent.” The Hill said Congress could either make the changes prescribed by the coalition to the procurement process within an infrastructure bill or in the SBA reauthorization coming in the next year.

Wages and Benefits

Unemployment Rolls Declining Faster In States Cutting Of Enhanced Benefits (06/29/2021)

The Wall Street Journal (6/27, Morath, Subscription Publication) reported the number of people receiving unemployment benefits is declining more quickly in states that are ending enhanced and extended payments this month, indicating that cutting off the assistance could encourage people to take jobs.

But, the New York Times (6/27, Cohen) said “in the St. Louis metropolitan area, where the jobless rate was 4.2 percent in May, those who expected the June 12 termination would unleash a flood of job seekers were disappointed.” Since Gov. Mike Parson (R) announced “made Missouri one of the first four states to halt the federal aid,” work-force development officials “said they had seen virtually no uptick in applicants. ... And the online job site Indeed found that in states that have abandoned the federal benefits, clicks on job postings were below the national average.” The Times added that “many economists are skeptical that enhanced jobless benefits have played an outsize role in the hiring squeeze. They are more likely to point to child care and continuing health fears with less than half the population fully vaccinated.”