NFIB Weekly News
Leading the News
Fed Says “Economy Is Doing Well,” Hikes Interest Rates.
USA Today (3/15, Davidson) reported that the Federal Reserve “raised its benchmark short-term rate by a quarter percentage point to a range of 0.75% to 1% and stuck to its forecast of two more such increases this year and three in 2018. Some economists had expected Fed policymakers to modestly step up the pace.” The Los Angeles Times (3/15, Puzzanghera) noted Fed Chair Yellen told reporters, “The simple message is the economy is doing well. ... We have confidence in the robustness of the economy and its resilience to shocks.” Reuters (3/15, Schneider) quoted her as saying, “We have seen the economy progress over the last several months in exactly the way we anticipated. ... We have some confidence in the path the economy is on.”
Along those lines, the AP (3/15, Crutsinger) said “the message the Fed sent...is that nearly eight years after the Great Recession ended, the economy no longer needs the support of ultra-low borrowing rates and is healthy enough to withstand steadily tighter credit.” The Wall Street Journal (3/15, Timiraos, Davidson, Subscription Publication) ran a similar analysis, while Politico (3/15, White) (3/15, White) said Yellen “is looking to hide the punch bowl from President Donald Trump. ... The move was the first of what could be three or four increases this year that the Fed hopes will keep a lid on inflation and potentially slow down the kind of economic growth Trump promised to deliver during his populist romp to the White House.”
Small Business Optimism Remains High. Business Climate
NFIB reports in its latest Small Business Optimism Index that small business optimism remains at record highs. Although the Index fell 0.6 points in February to 105.3, it still remains at one of its highest readings in 43 years, mostly due to small business owners continuing to anticipate better business conditions from Washington. NFIB President and CEO Juanita Duggan said, “It is clear from our data that optimism skyrocketed after the election because small business owners anticipated a change in policy.” NFIB Chief Economist Bill Dunkelberg added, “It is encouraging that the Index has persisted at 105 for three months in a row. Although optimism remains high, growth is still a problem because of restrictive government policies.”
US Employers Added 235,000 Jobs In February.
The AP (3/10, Rugaber) said the US “added a robust 235,000 jobs in February and raised pay at a brisk pace – signs that a resilient economy has given many companies the confidence to hire in anticipation of solid growth ahead.”
In a front-page article, the New York Times (3/10, A1, Cohen, Subscription Publication) said the “hefty gain” in jobs “clears the path for the Federal Reserve to raise its benchmark interest rate when it meets.” Reuters (3/10, Valetkevitch) also emphasized it “pointed to strength in the domestic economy and supported expectations the Federal Reserve will raise interest rates.”
The Washington Post (3/10, Swanson) said “Trump’s ambitious pledges to slash corporate taxes, cut regulations and boost spending on infrastructure have helped push stock markets to record highs in recent weeks.” The Wall Street Journal (3/10, A1, Kuriloff, Maxey, Subscription Publication) reported in a front-page article that investors are increasingly optimistic by the stock market’s performance since Trump’s election.
Reuters (3/10) reported last month’s hiring “was accompanied by steady wage growth, with average hourly earnings rising 6 cents, or 0.2 percent,” compared to a revised 0.2 percent gain in January. That lifted the year-on-year increase in wages “to 2.8 percent from 2.6 percent in January.”
Fed’s Beige Book Shows Economy Growing At Moderate Pace.
The AP (3/1, Crutsinger) reported the Federal Reserve’s latest Beige Book survey of economic conditions shows that “the US economy has been growing at a moderate pace, helped by sustained gains in consumer spending.” The Fed’s 12 regional banks “all depicted growth as either ‘modest or moderate’ from January through mid-February.” The AP said that the Beige Book “will be used when Fed officials next meet on March 14-15,” and adds that “the possibility of a rate hike at the meeting has risen recently.”
Bloomberg News (3/1, Condon, Smialek) reported the survey showed a further tightening in the labor market “but without significant acceleration in wages or inflation.” The Beige Book “said employment grew moderately while some districts reported ‘widening labor shortages,’ another sign the economy was at or near what economists consider full employment.” The survey results come amid “growing expectations that Fed officials will raise their benchmark lending rate by a quarter percentage point” at the meeting next month.
NFIB Releases February Small Business Jobs Report, Highlighting Tight Labor Market.
The National Federation of Independent Business has issued its February 2017 Jobs report. The report found small business owners are eager to hire, “but are struggling to find qualified workers.” NFIB President and CEO Juanita Duggan said, “The post-election optimism we’ve seen among small businesses has led to more job openings,” adding that “the only thing missing is qualified applicants.” According to the report, 52 percent of small business owners either hired or tried to hire in February, with 44 percent concluding they “found few or no qualified applicants.” NFIB’s Chief Economist Bill Dunkelberg said, “This is one of the tightest labor markets I have seen in the 43-year history of NFIB’s survey,” and Duggan commented, “Confidence remains high, but if the administration and Congress fail to address some of the small business community’s biggest concerns, like tax reform and repealing and replacing Obamacare, we may see our optimism numbers change.”
Trump Orders Federal Agencies To Help Identify Unnecessary Regulations.
Bloomberg Politics (2/24, Olorunnipa) reported that President Trump signed an executive order directing the heads of federal agencies to designate a “regulatory reform officer” and “create a task force to review existing regulations and make recommendations about which should be repealed or modified.” During the signing ceremony, Trump said, “Excessive regulation is killing jobs. ... Every regulation should have to pass a simple test: Does it make life better or safer for American workers or consumers? If the answer is no, we will be getting rid of it.”
The Washington Post (2/24, Eilperin) reported Trump’s order will establish task forces in every agency with the goal of “removing job killing regulations and increasing economic opportunity.” Trump said his order “will ensure that every agency has a team of dedicated people to research all regulations that are unnecessary, burdensome and harmful to the economy, and harmful to the creation of jobs and business.”
International Business Times (2/24, O'Neal) reported that the order “would give the agencies the authority to not only define their deregulation objectives, but execute those goals as well.”
The Wall Street Journal (2/24, Mann, Subscription Publication) reported the President signed the order surrounded by executives including Johnson & Johnson CEO Alex Gorsky, Lockheed Martin CEO Marillyn Hewson, and United Technologies CEO Gregory Hayes.
Disparity Among Regional Feds’ Growth Estimates Examined.
Bloomberg News (3/17, Condon) reported on the disparities in growth forecasts among the regional Fed banks. First-quarter GDP estimates “show widely different views of the economy, with the New York Fed pegging growth at a rather robust 2.8 percent on an annualized basis and its Atlanta counterpart putting it at a tepid 0.9 percent.” Bloomberg said this “so-called nowcasting,” is the result of using “computational methods to crunch numbers in real time.” Examining why the results are different, the piece quoted Stephen Stanley, chief economist at Amherst Pierpont Securities, as saying the estimates are “trying to answer different questions.”
Fed Expected To Forecast Faster Interest Rate Hikes. Small Business Marketing
USA Today (3/13, Davidson) reports that while “it’s all but certain the Fed will,” as it “strongly signaled,” raise the benchmark short-term interest rate by a quarter percentage point, there is “more drama” over whether “Fed officials will predict faster rate hikes this year and in 2018,” as several top economists predict. While “a meaningful pickup in economic activity has yet to occur,” Michael Gapen, chief US economist at Barclays say the Fed appears to be motivated by, in USA Today’s words, increased “consumer and business sentiment – rooted largely in President Trump’s plan to cut taxes and regulations and boost federal spending – and a rise in inflation.” However, Trump’s proposals are uncertain, with tax reform and spending stimulus predicted for the future, their exact form unknown, and Trump expected to change the Fed’s composition and leadership.
Portman Bill “Key Vehicle” For Regulatory Reform.
Politico (3/10, Grunwald) reported that while there’s a “flurry” of regulatory reform on Capitol Hill, Ohio Senator Rob Portman’s Regulatory Accountability Act will be “the key Republican vehicle to rein in rulemaking.” Politico characterized the piece of legislation as “significantly less radical than several aggressive bills recently passed by the House of Representatives,” but said industry groups “have pinned their hopes on this one attracting support from enough moderate Democrats to overcome a Senate filibuster and make it to Trump’s desk.”
US Household Net Worth Grew $2.8 Trillion In Fourth Quarter Of 2016.
The Wall Street Journal (3/9, Zumbrun, Subscription Publication) reported that US household net worth grew to a record $92.8 trillion in the last quarter of 2016, due in large part to fourth gains in the stock market, according to the Federal Reserve’s quarterly financial accounts report.
Stocks Finish Slightly Higher As Bull Market Turns Eight. The AP (3/9, Jay) reported that “the eighth anniversary for the current bull market turned out to be a quiet one” as stocks “meandered” on Thursday, “turn[ing] higher near the end of trading.” The Dow climbed 2.46 points to 20,858.19, the S&P 500 index added 1.89 points to close at 2,364.87 Thursday, and the Nasdaq finished 1.25 points higher at 5,838.81. The CBS Evening News (3/9, story 9, 0:20, Pelley) reported that “since stock prices bottomed out on March 9, 2009, during the Great Recession, the Dow is up well over 200 percent.”
Oil Prices Drop Below $50 On Expanding US Stockpiles.
Bloomberg News (3/10, Shenk) reported oil prices saw their “biggest weekly loss since November after surging US supplies erased three months of gains that followed OPEC’s deal to cut output,” dropping 9.1 percent. The drop was fueled by government data released Wednesday showing that “US crude stockpiles have expanded to a record for four straight weeks and output has climbed to the highest level in more than a year.” The New York Times (3/10, Krauss, Subscription Publication) reported prices fell “below $50 a barrel for the first time since” OPEC’s cut. Analysts expect the price of oil to drop “below $45 a barrel for a time,” but most expect prices to “bounce back and to continue to climb over the next few years.”
Senate Confirms Ross As Commerce Secretary.
Wilbur Ross was confirmed as commerce secretary by a 72-27 vote. The AP (2/27, Ohlemacher) said that “senators from both political parties were deferential to Ross at his nearly four-hour confirmation hearing, which was much more subdued than the confirmation hearings of other Trump nominees.” However, Sen. Elizabeth Warren “criticized Ross’ business ties to Russia and the way he ran a mortgage lender during the housing crisis.”
The New York Times (2/27, Rappeport, Subscription Publication) reported that Ross will be a “key leader for the Trump administration’s plans to overhaul trade deals” such as NAFTA.
Forecast Says Google, Facebook Will Continue To Lead Digital Ad Spend This Year.
The Wall Street Journal (3/14, Bruell, Subscription Publication) reported that eMarketer is now forecasting that spending on digital ads in the US this year will grow by 16% to $83 billion, with Google still leading at almost 41% of the total digital spend and Facebook expected to grab share from competitors for nearly 20% of the digital market. In display, Facebook is expected to have more than 39% of the total share for $16.33 billion in spending, while Instagram is helping drive the company’s mobile share and will contribute 20% of Facebook’s mobile revenue.
Facebook Adjusting Ad Reporting Terms To Add “Consistency And Clarity.” Wages and Benefits
MediPost’s Social Media & Marketing Daily (3/14, Sullivan) reported that Facebook has begun displaying different names for its ad metrics and definitions in a move toward more “consistency and clarity around the data it measures.” The report said “most of the name changes are subtle,” yet “each word in the name aims to enhance the description.” In addition, “names also will reflect whether the metric measures campaigns running on desktop computers or mobile smartphones. For example, ‘Apps Uses’ will update to ‘Desktop App Uses.’”
Study Finds Amazon Led US Paid Search For 2016.
Campaign US (3/13, Liffreing) reported that Kantar Media’s search analytics firm AdGooroo studied 2016 search trends and found that “Amazon is leading the desktop traffic game when it comes to ads” and “topped all US paid search advertisers last year.” The study “ranked the top 20 US brand websites by the number of consumer clicks on Google desktop ads in 2016” and “found that Amazon generated 471.4 million clicks,” or “92 percent more than the next brand in the ranking,” the Weather website. Retail and travel accounted for the most interest, the report says.
Sprout Social Index Finds Differences In Generations On Social Platforms.
MediaPost’s Research Brief (3/16, Loechner) reported on the social media preferences contained in the 2017 Sprout Social Index, which covers the habits of Millennials, Gen Xers, and Baby Boomers among platforms such as Facebook, YouTube, Instagram, and Snapchat. The index covered a variety of behaviors on social media, pointing out that all three cohorts “tend to follow a brand on social media before purchasing a product.” Millennials, the index said, “follow brands for entertainment value (38%) and information (42%),” while Gen Xers are “more likely to follow for contests (41%), deals and promotions (58%),” and “Baby Boomers fall somewhere in the middle and are looking for a healthy mix of deals and promotion (60%) and information (53%).”
Condé Nast, NBCUniversal, Vox Media Partner To Sell Digital Inventory.
MediaPost’s Real-Time Daily (3/9, Elkin) reported that “Condé Nast, NBCUniversal and Vox Media joined forces Thursday to deliver mobile video and branded content across all three of their digital networks,” in what Real-Time Daily calls “a move to demonstrate scale and reach — and to compete with Facebook and Google,” especially for Millennials.
Advertising Age (3/9, Poggi) reported that part of the argument for business from the partnership is that it “give advertisers the reach promised by some other digital platforms but in a safer environment where click fraud and ad viewability problems aren’t running rampant.”
Amazon, Pinterest Set To Shake Up Search Ad Market.
The Wall Street Journal (3/6, Shields, Subscription Publication) reported Amazon, Pinterest and other players may be poised to threaten Google’s dominance of the search advertising market, offering new options for ad buyers who’ve been stuck for years with Google. According to eMarketer, Google is expected to generate 76% of the US search ad spending in 2017, compared with 8.3% for Microsoft and less than 1% for Amazon. Forrester Research analyst Collin Colburn explained in a January report that consumers used to turn to search engines almost exclusively for answers but new platforms like Amazon and Pinterest are cutting into Google’s search status. Amazon, for example, quietly rolled out three new search ad products aimed at helping people find items to buy. In developing niches, consumers might look for clothes on Amazon, while they might turn to Pinterest for ideas on decorating their homes.
Labor Rules Delayed To Comply With Trump Moratorium.
The Hill (3/17, Devaney) reported on several new federal regulations. The Department of Labor (DOL) is “again delaying” the Labor Department’s Occupational Safety and Health Administration’s (OSHA) new “workplace limits on exposure to beryllium” from March 21 to May 20.
WPost Analysis: Older Americans Comprise Growing Segment Of Workforce.
According to the Washington Post (3/16, Bahrampour), there is a “small but growing segment of Americans who remain in the work force into their 70s, 80s, and 90s.” AARP Public Policy Institute Senior Strategic Policy Advisor Jen Schramm said that these senior workers are usually the highest or lowest earners, the latter enjoying their work and generally having longer lifespans, and the former working out of financial necessity.
Republicans Forge Ahead On Obamacare Repeal.
Reuters (3/9, Cornwell, Abutaleb) reported Republicans are moving forward “with their plan for a massive overhaul of the U.S. healthcare system backed by President Donald Trump, despite Democratic concern that the cost of the bill and its impact on the budget remain unknown.”
President Trump on Saturday continued to express his support for the American Healthcare Act as Vice President Pence traveled to Louisville, Kentucky to pitch the bill recently unveiled by House Republican leaders. “The White House is trying this weekend to rally support for the ObamaCare replacement plan,” Fox News (3/11, Weber) reported on its website, with Pence promising at a business roundtable in Kentucky that “the ObamaCare nightmare is about to end.”
House Budget Committee To Consider GOP Healthcare Bill Wednesday. McClatchy (3/13, Daugherty) reports that the GOP bill “will face its biggest test so far on Wednesday” as the House Budget Committee, which is “filled with conservatives could derail the legislation” before it reaches the House floor. For the bill to fail, four Republicans would need to join Democrats in voting against the bill. At least seven Republicans on the panel “have made public statements in the past week indicating they want a full repeal of Obamacare, but it’s unclear whether four of them will decide to go out on a limb and vote no.”
Senate Votes To Reverse Obama-Era Rule On Labor Law Violations.
The AP (3/6, Freking) reported that the Senate voted 49-48 to reverse an Obama Administration rule “designed to ensure government contractors disclose violations of federal labor laws as they seek more work.” The rule “addressed government auditors’ concerns over the years that contracting officers frequently failed to consider violations when awarding contracts because they lacked adequate information.” Business groups said it would increase compliance costs “and punish all contractors for the actions of a few.” Reuters (3/6, Iafolla) said the reversal was passed under the Congressional Review Act. President Trump has signed three CRA resolutions thus far.
The Washington Post (3/6, Kindy) reported that “a half-dozen other worker safety regulations are also in Republican crosshairs. ... Many are directed at companies with federal contracts. Such companies employ 1 in 5 American workers – meaning the effort could have wide-ranging effects.”
Pence Tells Small Business Owners Administration Will “Lift The Weight Of Obamacare.”
During a meeting of small business executives in Ohio, Vice President Pence vowed that the Trump Administration will “lift the weight of Obamacare off American families and businesses,” the AP (3/2, Sewell) reported. Pence, who was accompanied by HHS Secretary Price, “told more than 20 businesspeople that he brought assurances from the president that the administration will ‘repeal and replace Obamacare.’”
House GOP ACA Replacement Plan Unveiled.
House Republicans unveiled the 123-page American Health Care Act late Monday afternoon. Reports portray the bill as attempting to fulfill the GOP promise of repealing and replacing the Affordable Care Act while still keeping the most popular aspects of the ACA.
The Washington Post (3/6, A1, Goldstein, Debonis) reports, “Under two bills drafted by separate House committees, the government would no longer penalize Americans for failing to have health insurance but would try to encourage people to maintain coverage” by letting insurers impose a surcharge “for those who have a gap between health plans.” McClatchy (3/6, Pugh, Daugherty) says that “most of the proposal comes as advertised: it calls for ending income-based federal subsidies to help purchase marketplace coverage and wipes out all taxes that helped pay for the subsidies.”