NFIB Weekly News

The NFIB Small Business Optimism Index for Septmber was the third-highest in the survey’s 45-year history, continuing a historic 23-month positive trend. NFIB President and CEO Juanita Duggan said the index is “evidence that tax cuts and regulatory rollbacks are paying off for the economy as a whole. ... Our members say that business is booming and prospects continue to look bright.” NFIB Chief Economist Bill Dunkelberg said, “With profits and investment remaining strong, our hope is that policymakers will stay the course and not screw around with success.”

The AP (9/28, Gordon) reported that Republicans “have sped legislation through the House to expand their massive new tax law” by approving a bill that “would make permanent the individual and small-business tax cuts in the law.” The AP reported House Democrats “continued their solid opposition to tax-cut legislation, asserting it favors corporations and wealthy individuals over middle-income Americans,” even as “several Republican House members, facing tough re-election fights in the high-tax, Democratic-leaning states of New York and New Jersey, voted against their party’s bill.”

“The bulls have regained control on the American equity market,” Bloomberg News (9/21, Popina) reported last Friday, as “the S&P 500 Index capped a second weekly advance, ending the five days less than two points away from its all-time high” while “the S&P 500 rose 0.9 percent to 2,929.67 in the five days through Friday,” and “the Dow Jones Industrial Average advanced 589 points to 26,743.50, ending at an all-time high.” According to Bloomberg News, the DJIA “was the last of the major indexes to reclaim records set in January.”

Tuesday morning of last week, President Trump tweeted about the strength of small business optimism with Business Insider (9/11, Bryan) reporting that NFIB’s small business optimism index hit a record 108.8 for August. NFIB President and CEO, Jaunita Duggan, told Business Insider that “A lot of times when the optimism index has gotten up around this type of record, it’s based on expectations like is it a good time to expand, expected sales, and that sort of thing. ...The index is dominated in this case by business activity that actually grows GDP: job creation plans, job openings, capital spending plans, and earnings.”

The NFIB Small Business Optimism Index for August reached 108.8, a new record in the survey’s history. The survey showed new records in job creation plans and unfilled job openings, as well as the percentage of small business owners who believe now is a good time to expand. NFIB President and CEO Juanita Duggan is quoted saying, “Today’s groundbreaking numbers are demonstrative of what I’m hearing everyday from small business owners – that business is booming. As the tax and regulatory landscape changed, so did small business expectations and plans. ... We’re now seeing the tangible results of those plans as small businesses report historically high, some record breaking, levels of increased sales, investment, earnings, and hiring.”

CNN (10/11, Borak) reported, “US deficits are expected to balloon to $1 trillion when official figures are released next week – but Treasury Secretary Steven Mnuchin says the massive Republican tax cut won’t be to blame.” Rather, Mnuchin “said Democrats were at fault for pushing spending increases on health and education in exchange for military budget increases as part of a massive spending package President Donald Trump signed in September 2017.” He said in a Thursday interview with CNN, “People are going to want to say the deficit is because of the tax cuts. That’s not the real story. The real story is we made a significant investment in the military which is very, very important, and to get that done we had to increase non-military spending.” The piece notes that, to avoid a government shutdown, both parties “struck a deal last year that included raising the spending on other government programs.”

In a piece for the Springfield (MO) Business Journal (10/10), Small Business Administration Region VII administrator Tom Salisbury said, “Last week, lawmakers in the U.S. House of Representatives passed what they are calling ‘Tax Reform 2.0’ – a permanent extension of tax law changes for individuals.” Some of the “favorable responses” so far to the temporary individual tax rate changes “became apparent in recent small-business surveys and reports. Another impactful change is the nearly doubling of the amount small businesses can expense, now up to $1 million under IRS code Section 179 in 2018.” Salisbury said, “these tax cuts should definitely be made permanent. In our region, the reward would be the growth and the sustainability of our many small communities.”

The AP (10/2, Crutsinger, Leblanc) reported Federal Reserve Chairman Jerome Powell said yesterday that “the combination of steady, low inflation and very low unemployment shows the country is going through ‘extraordinary times.’” The AP reported Powell “noted in his speech that the unemployment rate stands near a 20-year low of 3.9 percent, while inflation has risen close to the Fed’s 2 percent target for annual increases in inflation.” Powell acknowledged that the current data “runs counter to an economic theory known as the ‘Phillips curve,’ which argues that low unemployment forces employers to push up wages to compete for scarce workers, triggering more inflation.”

The New York Times (10/5, Casselman) reported that the Labor Department on Friday announced that 134,000 jobs were added last month, moving the unemployment rate down to 3.7 percent, “the lowest since 1969.” In addition, “average earnings rose 8 cents an hour and are up 2.8 percent over the past year.” The Times states that “by nearly any measure, today’s labor market is the strongest since the dot-com boom of the late 1990s and early 2000s. Job growth has repeatedly defied economists’ predictions of a slowdown.” The Times added, “African-Americans, Latinos and members of other groups that often face discrimination are experiencing some of their lowest rates of joblessness on record.”

Reuters (10/4, Cole) reported, “As stunningly strong US economic data drove Treasury yields to their highest since mid-2011,” rising “12 basis points to 3.19 percent, the highest since June 2011.” This “groundswell of economic optimism swept the US dollar to a six-week high on a basket of currencies and it was last trading at 95.762.” The Wall Street Journal (10/3, Otani, Subscription Publication) said the economic data show the US economy defying forecast stagnation.

The Wall Street Journal (10/4, Mims, Subscription Publication) reported that there is an explosion of microbrands popping up across the Internet, and their boom is propelling supporting companies like Amazon Prime, Shopify, Lumi, and UPS. These brands outsource more material than their predecessors, relying on cheap goods overseas to propel their profits in the online space.

Salesforce is acquiring a startup named Rebel that makes interactive email services, and media reports are positioning the move as an expansion of its Marketing and Commerce Cloud and another step in an escalating competition with Adobe. Axios (10/6, Fernandez) reported Rebel’s services will be integrated into Salesforce, but it’s not yet clear if Rebel will continue to provide its services to its current partners, including Oracle and IBM. Deal terms were not disclosed.

The Motley Fool (9/27) reported Amazon “has launched Amazon Storefronts, a new ‘store’ that exclusively sells products from small and medium-sized businesses from the United States.” Amazon Storefronts currently “offers more than 1 million products curated by Amazon from 20,000 small and mid-sized businesses” from each of the 50 states. The selection at launch includes “products in categories including back to school, Halloween, home, kitchen, pet supplies, and books.” Additionally, Amazon “plans to support Storefronts with its first-ever national advertising campaign.”

Forbes (9/23, Marks) reported that Amazon has “launched Amazon Storefronts – a new section of its site that only lists products sold by U.S. small- and medium-sized businesses.” Amazon “says it’s a way for shoppers to find smaller merchants more easily and has chosen more than one million products from about 20,000 businesses to be featured on the site, based on customer ratings.”

Ad Age (9/21, Slefo) reported “Adobe has fired a shot across several bows” with the deal to pay $4.75 billion to buy Marketo, “which will help it compete in marketing services against Microsoft, Oracle, SAP and even the great powers of digital advertising, Google and Facebook.” The biggest message, however, likely was meant for Salesforce. Ad Age said Adobe and Salesforce are both “racing to offer marketers one-stop, cloud-based services that make sense of voluminous data and automatically take action whenever consumers or clients engage though channels such as search, social media, email and video.” Ad Age described steps in the competition, quoting John Koetsier, VP of Insights at the marketing intelligence provider Singular, who said Marketo often takes clients from Salesforce’s Pardot. He added, “Some marketers even view Pardot as a kind of stepping stone to Marketo. ... Now, Adobe owns the ‘grown up’ product to Salesforce’s beginner solution.” Marketo also gives Adobe what Ad Age calls “another massive dataset to help it compete with Facebook, Google and others.”

Politico (10/14, Noah) listed a “guide to some of the most ambitious liberal causes Democrats will have to navigate amid widespread expectations that they will at least capture the House,” including the $15 minimum wage. Politico notes that two years ago, Sen. Bernie Sanders “found few Democrats willing to support his call for raising the hourly minimum wage to $15, up from the current $7.25. Now it’s hard to find any congressional Democrat who opposes it. Bills that would phase in such an increase over several years have drawn the support of nearly two-thirds of the Senate Democratic Caucus and more than 170 House Democrats, including Minority Leader Nancy Pelosi.” While polls show both Republican and Democrat voters in favor of raising the minimum wage, “Republican opposition in the Senate would likely doom a $15 wage minimum – unless Trump supported it to shore up his image as a champion of the working class.”

The Hill (10/5, Hellmann) reported on a brief from the Kaiser Family Foundation released Friday found “insurers in the individual market performed better financially in the first six months of 2018 than they have in all of the years of the Affordable Care Act.” The Hill added the brief “shows insurers returning to the levels of profitability seen before the passage of the ACA, but notes recent actions from the Trump administration ‘cloud expectations for the future.’”

On its website, CNBC (10/7, Cornfield) reported that although everyone is not an ACA supporter, comparing “the typical health insurance plan regulated by the Affordable Care Act with a cheaper short-term health plan...might just change” their minds. The article said, “Short-term health insurance is a stripped-down health care plan that doesn’t fall under ACA regulations.” They are not required “to cover specific services, such as prescription medication or maternity benefits, and they are of limited duration: just three months.” An expert with first-hand knowledge of short-term plans says they provide a false sense of security, but consumers “have to read the fine print really carefully.”

The Hill (9/26, Elis) reported that small businesses say “the most important issue affecting them is the cost of health care, according to the National Small Business Association’s annual Politics of Small Business Survey.” Data show 40 percent of respondents said the cost of health care is the one issue they discuss the most with elected officials.

The Hill (9/29, Weixel) reported Democratic candidates for governor in states including Wisconsin, Georgia, and Florida “are seizing on the popularity of Medicaid, making it a central part of their campaigns and using it to attack their GOP opponents.” Following the GOP’s failure to repeal Obamacare last year, “advocates see momentum on Medicaid in state capitals” and see it as a key “to breaking through GOP gridlock, and making expansion a reality in states that have so far refused to do so.”