NFIB Weekly News
NFIB Weekly News
Leading the News
US Job Openings Reached Record Level In June. (08/15/2017)
Bloomberg News (8/8, Chandra) reported that according to the Labor Department’s “JOLTS report,” a “June surge in US job openings to a record indicates demand for workers remained strong at the end of the second quarter.” Bloomberg says the increase in openings highlights “the need for workers in an economy that’s continuing to expand.” Meanwhile, “the pool of qualified Americans is shrinking and making some positions tougher to fill, one reason economists expect the monthly pace of hiring will eventually cool.”
US Labor Force Participation Continues To Rise. Business Climate
USA Today (8/13, Davidson) reported that US employers added 209,000 jobs in July, pushing the labor force participation rate from 62.7 percent to 62.9 percent and representing what many observers consider a “vibrant labor market” that is continuing “to draw hundreds of thousands of Americans back into the labor force” and that is “especially lifting less-educated workers in their prime working years.” The trend “could have significant implications for wage growth and interest rates,” as rising labor force participation slows the decline of the unemployment rate, helping to prevent the acceleration of average pay increases and to temper inflation, “which could prompt the Federal Reserve to put off an anticipated third interest rate hike in 2017.”
NFIB Data Shows US Small Business Hiring Grows In July.
The NFIB reports that its Index of Small Business Optimism climbed 1.6 points in July from June for a reading of 105.2, boosted by gains in hiring. Of the 10 components of the index, seven saw improvements for the month, with job openings seeing the largest improvement, rising 5 points from June to July. NFIB President and CEO Juanita Duggan said, “Strong consumer demand is boosting small business optimism.” Duggan added, “Small business owners are feeling better about the economy because their customers are feeling better about the economy. This is a good trend that we hope continues.” NFIB Chief Economist Bill Dunkelberg added, “Sixty percent of small business owners reported hiring or trying to hire in July.” However, he noted, “Within that group, 87 percent said they had a tough time finding qualified workers. The labor market is getting very tight, and the problem is most severe in the construction and manufacturing sectors.”
Reuters (8/4, Chin) added that “the percentage of U.S. small business owners saying they planned to add to payrolls in July exceeded those with plans to cut jobs by 19 percentage points on a seasonally adjusted basis,” which was “the strongest reading since December 1999.”
Big Six Release Tax Reform Principles.
The New York Times (7/27, Rappeport, Subscription Publication) reported that the principle Republican tax negotiators in Congress and the White House – known as the “Big Six” – have released a joint statement outlining broad principles of tax reform and promising to pass tax overhaul legislation by the end of the year. The most “notable” aspect of the statement “was the dropping of the proposed border adjustment tax on imports,” an item that House Speaker Ryan had suggested last year as a “central plank of the Republican tax plan” but that has drawn criticism from energy companies, retailers, the Koch brothers, and many congressional Republicans in recent months. According to House Ways and Means Chairman Kevin Brady, Republicans are scheduled to convene next month to begin discussing drafting the legislation.
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.
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.”
Study: Trump’s Regulation Reductions Have Saved Businesses Billions. (08/15/2017)
A new study from the conservative group American Action Forum found that President Trump’s efforts to cut regulations have “saved businesses nearly $4 billion per year compared with President Barack Obama’s pace of imposing regulations,” the Washington Times (8/8, Boyer) reported. According to the study, “final rule costs during Mr. Trump’s first six months in office will cost US businesses about $378 million per year, compared with $4.2 billion for the same period” during the Obama Administration. The study found that compared to the Obama Administration, Trump “has imposed 5 percent of the lifetime costs on businesses, 9 percent of the annual costs and 12.5 percent of the employee hours required for paperwork.”
Fed Minutes Expected Wednesday Could Give Insights On Future Rate Hikes. Small Business Marketing
USA Today (8/14, Davidson) reports that minutes from the Federal Reserve’s July meeting, to be released Wednesday, will provide information on whether the Fed plans to raise interest rates again this year. The article points out that other economic data to be released this week “will also reveal whether retail sales bounced back last month and provide the latest data on housing starts and industrial production.” USA Today writes that “most Fed officials have downplayed this year’s drop in annual inflation further below the central bank’s 2% target, attributing it to temporary declines in prices for items such as cell phone service and prescription drugs.”
GOP Leaders Discuss “Mix” Of Temporary, Permanent Changes To Tax Code.
In a feature article, Bloomberg News (8/8, Edgerton) reported that “officials on the House and Senate tax committees are talking with the White House about a hybrid approach” to tax reform. The article stateed that “mixing and matching proposals – making some permanent and others temporary --- could be a potential workaround for GOP leaders who want to use a budgetary process known as reconciliation to prevent Senate Democrats from blocking tax legislation.” Bloomberg added that the White House “places a priority on permanence” regarding tax reform, and House Speaker Paul Ryan (R-WI) has been “pushing especially for the corporate rate cut to be permanent.” The article also quoted White House spokeswoman Natalie Strom saying, “consistent with our joint statement, we are placing an emphasis on permanence but no decisions have been made yet.”
US Economic Expansion May Last Two More Years, Experts Say.
Reuters (8/11) reported that according to a poll of economists it conducted, the majority believe that “the U.S. economic expansion will last at least another two years.” The article added that “the recovery from the devastating 2007-2009 financial crisis has been unusually lengthy,” and “the latest growth stretch has already lasted 96 months.” Describing its poll responses, Reuters wrote that “the U.S. expansion has more than two years to go, according to 34 of 57 economists who answered an additional question on the business cycle,” and it added, “of those economists, 21 said it would last two to three years and 13 said more than three years.” Of note, “none of the economists, based in the United States, Canada and Europe, expected it to end within a year,” Reuters added. Respondents to the poll also predicted that “the Fed would raise interest rates by 25 basis points in October or December.”
GOP Debating Corporate Tax Reforms.
The Hill (8/6, Jagoda) reported that “Republicans are wrestling with how low to cut the corporate tax rate.” The article added that “while GOP lawmakers and the White House all believe that the current rate of 35 percent is too high and makes the U.S. business climate less competitive, some policymakers want to cut it more deeply than others,” and division about how deeply to cut corporate taxes “is a challenge for Republicans as they seek to pass tax reform by the end of the year.” The Hill adds, “Trump has called for a 15-percent corporate tax rate since the early months of his presidential campaign,” and White House National Economic Council Director Gary Cohn “said that’s still the administration’s goal.” However, “the tax plan Speaker Paul Ryan (R-Wis.) released last year proposed a 20 percent corporate rate.”
Bloomberg News (8/4, Leondis) reported that Cohn in a Bloomberg TV interview “suggested that the U.S. must cut its corporate tax rate by at least a third to compete with other developed countries.” Cohn asserted, “We cannot be substantially higher than the OECD average tax rate,” which is about 23 percent. Cohn added, “We’ve got to get in line with the rest of the world, we’ve got to entice capital to be invested in the United States.”
Trump Plans Sixth Round Of Judicial Nominees.
The Washington Times (8/3, Boyer) reported that President Trump has announced “his intention to appoint a new round of 10 federal judges, the sixth group of judicial nominees since he took office, and five more federal prosecutors.”
Trump Outpacing Obama, Bush On Rate Of Judicial Confirmations. The Washington Times (8/1, Swoyer) reported that the Senate confirmed Kevin Christopher Newsom to the 11th US Circuit Court of Appeals, marking the fifth of President Trump’s court picks to be confirmed. Trump, the Times added, is “outpacing his predecessors when it comes to getting federal judges confirmed.” In his first six months in office, former President Obama “had zero judges confirmed,” and former President George W. Bush “had one circuit judge and two district judges confirmed by August of his first term.”
Facebook Changes Impression Reporting And Removes Unintentional Clicks. (08/15/2017)
Reuters (8/8) reported that Facebook announced that it will “no longer count clicks categorized as unintentional in advertiser’s campaigns” and will try to “reduce [the] number of unintentional clicks by looking further into additional bounce rate metrics.” Facebook also said it will provide advertisers with “two new metrics; gross impressions and auto-refresh impressions” which will “help offer more clarity on number of ads shown to people.”
Pinterest Opens Promoted Video Option To All Advertisers. Wages and Benefits
Social Media Today (8/9, Hutchinson) reported that Pinterest has opened its promoted video option to all advertisers after a year-long test. The promoted videos autoplay and “stand out in the feed...as users scroll through,” according to Pinterest. The report added that video tutorials and how-to content “in particular, seems to grab attention on Pinterest.”
Social Media Today Posts “Cheat Sheet” For Social Image Sizes.
Social Media Today (8/9) posted a handy graphic guide as a “Social Media Image Sizes Cheat Sheet.” The reference sheet covers Facebook, Google+, Twitter, Instagram, LinkedIn, Pinterest, and YouTube.
Sources Say Google Is Working With Publishers On News Product Called “Stamp.”
The Wall Street Journal (8/4, Sharma, Marshall, Subscription Publication) reported that its sources say Google is working on a news product called “Stamp” that is similar to Snapchat’s “Discover” feature and is an outgrowth of Google’s work on its Accelerated Mobile Pages (AMP) initiative. The Stamp feature, which could be announced this week, is designed to let users swipe through slides that contain text, images, or videos, according to the Journal, which said that Stamp-related content would be linked with Google’s search function and would appear in results. Revenue and splits are unclear, the article says.
Facebook Will Fact-Check Some Posts, Add Reporting And Other Context.
Bloomberg News (8/3, Frier) reported that Facebook “is taking a more aggressive step to thwart the spread of fake news on its platform” and has developed an algorithm to identify stories that should be checked by “third-party fact checkers.” If those fact checkers write a story that debunks the original post or adds context, “that post may appear below the original content on Facebook’s news feed.” The report said that Facebook “has been working closely” with the fact checkers Snopes and Politifact.
Survey Finds Consumers React Positively To Some Types Of Advertising.
The New York Times (7/30, Schonbrun, Subscription Publication) reported that a consumer survey of 400 people published in the Journal of Consumer Research found consumers are generally more positive about advertising than commonly believed. The survey – done by Northwestern University professor Kent Grayson and Seattle University professor Mathew Isaac – found that specific techniques, including “offering to match a competitor’s low prices, reporting a high rating on a site like Amazon or Yelp or mentioning a recent ranking by a third-party source like U.S. News & World Report, received the most positive reactions from participants,” while the use of paid actors or celebrity influencers was described as “deceptive” or “manipulative.”
Productivity Rose At 0.9 Percent Rate Last Quarter. (08/15/2017)
The Wall Street Journal (8/9, Leubsdorf, Subscription Publication) reported that worker productivity rose at a 0.9 percent rate in the second quarter, up from a 0.1 percent growth rate in the first quarter. Despite the increase, the Journal called the gains modest, with a slow trend unlikely to end soon.
WSJournal Analysis: Gig-Economy Firms Having Trouble Attracting, Keeping Workers.
A Wall Street Journal (8/8, Gee, Subscription Publication) analysis reported on the impact the job market is having on gig-economy companies like Uber, saying such firms are having difficulty attracting and retaining workers and have begun offering better perks and benefits in an effort to enlist and keep workers.
US Added 209,000 Jobs In July, “Hiring Remains Robust.”
USA Today (8/4, Davidson) reported that “U.S. payrolls surged for the second straight month in July as employers added 209,000 jobs, underscoring that hiring remains robust despite a tight labor market making it tougher to find workers.” The article added that the unemployment rate “fell to 4.3% from 4.4% as a big gain in employment offset a large rise in the number of Americans working or looking for jobs.”
The Washington Post (8/4, Swanson) reported on the jobs report as “surpassing economists’ expectations and suggesting the economy continues to thrive after an extended streak of job gains in recent years.” The Post added that “the U.S. labor market has made strong and steady gains in recent months, even as this period of economic expansion has stretched into the third longest in history.”
Bloomberg News (8/4, Jamrisko) reported that “the U.S. labor market hit its stride in July, as employers added workers at a solid clip.” Bloomberg News also called the job gains “broad-based,” saying they covered several sectors. In addition, the article stated, “stronger household incomes and buoyant consumer confidence are helping to propel demand, while a rebound in global growth has provided more opportunities for American exporters.”
McConnell Open To Considering Bipartisan Plan To Continue Insurer Subsidies.
The AP (8/5, Beam) reported that Senate Majority Leader Mitch McConnell told reporters that “he’d consider a bipartisan effort to continue payments to insurers to avert a costly rattling of health insurance markets” and while he stated that there is “still a chance” the Senate could revive its legislation to repeal and replace Obamacare, McConnell “acknowledged the window for that is rapidly closing.” McConnell added that Senate Health, Education, Labor and Pensions Committee Chairman Lamar Alexander of Tennessee is working on “some kind of bipartisan approach” and asserted, “If the Democrats are willing to support some real reforms rather than just an insurance company bailout, I would be willing to take a look at it.”
Obamacare “Skinny Repeal” Fails To Pass In Senate.
The Senate rejected the so-called Obamacare “skinny repeal” measure introduced by Senate Majority Leader McConnell, effectively ending GOP repeal efforts for the time being. Vice President Pence had gone to the Senate in expectation of a possible 50-50 vote, but Sen. John McCain ultimately voted no, along with Sens. Susan Collins, Lisa Murkowski, and all 48 members of the Democratic caucus.
CBS News (7/28) reported on its website that McCain “urged his colleagues to ‘return to the correct way of legislating and send the bill back to committee, hold hearings, receive input from both sides of aisle, heed the recommendations of nation’s governors, and produce a bill that finally delivers affordable health care for the American people.’”
Centrist “Problem Solvers Caucus” Working On Obamacare Reform In House. Politico (7/30, Caygle, Demko) reported, “A coalition of roughly 40 House Republicans and Democrats” are unveiling proposals to fix Obamacare that “they hope will gain traction after the Senate’s effort to repeal the law imploded.” The “Problem Solvers caucus,” headed by Reps. Josh Gottheimer (D-NJ) and Tom Reed (R-NY), “is fronting the effort to stabilize the ACA markets ... Their plan focuses on immediately stabilizing the insurance market and then pushing for Obamacare changes that have received bipartisan backing in the past.”
Labor Department Pushes Towards Reversing Overtime Pay Rule.
Reuters (7/25, Wiessner) reported that the Department of Labor has moved closer to reversing an Obama Administration rule that extended mandatory overtime pay to 4.2 million workers, calling for public comments on the rule, which is the “first step in revoking or revising it.” The development comes after a group of 21 states and business groups challenged the policy in a lawsuit last year, claiming it would force many employers to change salaried employees into hourly employees.