NFIB Weekly NewsLeading the News Trump Administration Continues To Emphasize Tax Reform. (10/17/2017)
The AP (10/16) reported that “by slashing corporate tax rates, the Trump administration said Monday, the average U.S. household will get an estimated $4,000 more a year.” The piece explained “this stunning 5 percent increase is likely to be met with skepticism from tax experts and Democratic lawmakers.” The analysis by Kevin Hassett, chairman of the White House Council of Economic Advisers, “said that the considerably lower rate would spur more investment by companies, which would then boost hiring and worker productivity.” The Wall Street Journal (10/16, Rubin, Subscription Publication) noted that economists generally believe that the corporate tax burden affects both shareholders and workers.
Small Business Optimism Lower In September. (10/10/2017)
The NFIB (10/9) reported that its Index of Small Business Optimism fell from 105.3 in August to 103 in September. The decline was prompted by a sharp dip in expected sales. The percentage of small business owners expecting improved sales over the next three months fell from 27% in August to 15% in September, while the number of owners who believe the present is favorable for expansion fell by 10 points. NFIB President and CEO Juanita Duggan said, “The temptation is to blame the decline on the hurricanes in Texas and Florida, but that is not consistent with our data.” Duggan added, “Small business owners across the country were measurably less enthusiastic last month.” Meanwhile, NFIB Chief Economist Bill Dunkelberg said, “The drop-off was consistent around the country regardless of region, and it’s likely that members in Florida and Texas were underrepresented in this survey because of the obvious disruptions.” He noted, “The adjusted average employment change per firm dipped to -0.17, which is a significant drop in hiring activity.”
Trump Touts Tax Plan In Speech To Manufacturers. (10/03/2017)
In a speech to manufacturers, President Trump praised the proposed tax reform framework. The Hill (9/29, Jagoda) reported that in the speech, Trump described the plan as a “giant, beautiful, massive, the biggest ever in our country, tax cut,” and said “we need a tax code that encourages companies to stay in America, grow in America and hire in America.” The Hill added that “Trump spoke about several aspects of the plan that are of particular importance to manufacturers,” including that it would “lower the corporate tax rate from 35 percent to 20 percent, and would lower the rate for so-called pass-through businesses to 25 percent.”
NFIB Survey: US Small Businesses Expanding At Strongest Pace Since 2006. (10/03/2017)
USA Today (9/26, Davidson) reported that American entrepreneurs “are moving ahead with investment and expansion plans that could juice economic growth.” 32% of small businesses “are planning capital outlays in the next three to six months, the strongest reading since 2006,” according to the survey, “and 27% say the next three months is a ‘good time to expand,’ the largest share in 13 years.” An additional survey by the National Association for Business Economics “predicts that business investment overall – by small and larger companies – will grow 4.4% this year, up from their 3% median estimate in December.” USA Today pointed out that “businesses that expand, buy new equipment or build new structures typically hire workers to operate the machines or occupy buildings, while the factories that make the products generally need to staff up as well.” In addition, the NFIB survey found that “some companies are splurging on labor-saving equipment because they can’t find workers,” noting that “with unemployment at a low 4.4%, nearly nine of 10 small businesses that were hiring last month said there were few or no qualified applicants.”
Cassidy: “48 Or 49” Republicans Back Plan To Replace ACA With Block Grants. (09/19/2017)
The Washington Times (9/17, Howell) reports that with time running out to replace the Affordable Care Act with just 50 votes, Senators pushing a plan to replace the law with state block grants “are making real noise...insisting they are just one or two votes shy and that President Trump can nudge their last-gasp bill to victory.” Sen. Bill Cassidy, who co-wrote the legislation with Sen. Lindsey Graham said Friday, “We are thinking that we can get this done by Sept. 30.” Cassidy “said his informal whip count stands at ‘48 or 49’ Republican votes.” However, Sen. Rand Paul “announced Friday that he is staunchly opposed to the bill, lengthening the odds of success.” Democrat leaders, meanwhile, “are rallying Obamacare’s defenders to stamp out a revived threat to their signature law.” In a tweet over the weekend, Senate Minority Leader Schumer wrote, “Trumpcare is back & Senate GOP has until Sept 30 to pass their bill. ... We need your voices more than ever!”
Hatch: Big Six “Will Not Dictate” Finance Committee Approach To Tax Reform. (09/19/2017)
Reuters (9/14, Morgan) reports, “In a defiant statement coming as Republican leaders from the Trump administration and Congress prepare to unveil their tax reform framework,” Senate Finance Committee Chairman Orrin Hatch “said his panel would not be ‘anyone’s rubber stamp’ and that its legislation would reflect the consensus views of its members.” Referring to the “‘Big Six’ negotiators from the White House, Senate and House of Representatives,” Hatch added, “The group...will not dictate the direction we take in this committee. ... The Finance Committee will not be bound by any previous tax reform proposal or framework when we start putting our bill together.”
Business Climate Trump Has Nominated Five For IG Positions In Recent Months. (10/17/2017)
The Washington Times (10/15, Noble) reported President Trump “has picked up the pace” of selecting inspectors-general, having nominated five for IG positions in recent months: Gail S. Ennis as IG for the Social Security Administration, John Edward Dupuy for the Office of Personnel Management, Christopher Sharpley for the CIA, Mark L. Greenblatt for the Export-Import Bank, and Robert Storch for the NSA. According to the Project on Government Oversight, at least 12 of 34 inspector-general positions requiring presidential nominations are currently vacant.
Trump Administration Has Slowed Creation Of New Regulations To “A Dribble.” (10/17/2017)
The Economist (10/13, Economist) reported on the Trump Administration’s efforts to reduce government regulation, which it calls “one of the three pillars” of the president’s economic agenda, along with “tax cuts and trade reform.” The Economist says growth of regulation “is difficult to measure precisely, but the long-term trend toward excessive rulemaking has been obvious,” and points out that “both Republicans and Democrats have presided over regulatory expansions.” The Economist maintained that “the impact of the Trump Administration has been dramatic,” adding that “the flow of new rules is suddenly a dribble.” The president has slowed rulemaking by two methods; “First, on coming to office, he ordered government agencies not to impose any net new regulatory costs on companies, regardless of the benefits of doing so, and said that in order to write any new rules they would have to repeal two old ones.” Second, “Mr Trump has signed 14 bills stopping rules that were issued late in the Obama administration, and were therefore still subject to review by Congress, from going into effect.”
Fed Chair Upbeat On US Economy. (10/17/2017)
The AP (10/15, Crutsinger) reported that, at an international banking seminar, Federal Reserve Chair Janet Yellen “sketched a bright outlook for the U.S. economy and for inflation prospects in coming months.” She said that the impact of the recent hurricanes “are quite noticeable in the short term,” slowing economic growth, “history suggests that the longer-term effects will be modest and that aggregate economic activity will recover quickly.” The AP suggested the comments indicate the Fed will resume raising interest rates soon. Yellen also “acknowledged that the persistence of undesirably low inflation this year has been a surprise,” but predicted that temporary factors would stop having effects soon, leading to increasing inflation.
Mnuchin: Trump Looking At “A Lot Of People” For Fed Chair. (10/17/2017)
MarketWatch (10/16, Robb) reported Treasury Secretary Steven Mnuchin “said a decision on the next Fed chief was one of the most important decisions President Donald Trump would make.” During a moderated question-and-answer session at a conference sponsored by the Institute for International Finance, he explained President Trump is casting a wide net in his search, saying, “We’re going through this process very carefully. He is looking at a lot of people.” Mnuchin “declined to give any more specifics about the process.”
White House Seeking Fed Chair That Supports Deregulation. (10/10/2017)
Bloomberg News (10/6, Torres, Jacobs, Mohsin) reported “the White House team leading the search for the next generation of Federal Reserve leaders is seeking contenders willing to roll back financial regulations, but also with experience in monetary policy and the consensus-building skills to run a large organization, according to three officials familiar with the process.” The article added President Trump has a “shortlist of five names for Fed chair: former Fed Governor Kevin Warsh, Stanford University economist John Taylor, current Fed Governor Jerome Powell, National Economic Council Director Gary Cohn and the current chair, Janet Yellen.”
Treasury Department Outlines Proposed Changes To Financial Rules. (10/10/2017)
The New York Times (10/6, Hsu, Subscription Publication) said the Treasury Department released a report “taking aim at the Dodd-Frank Act” as it contained recommendations for “a vast reworking of Wall Street rules adopted in response to the financial crisis.” According to the Times, while “the ideas were welcomed on Wall Street, where banks complain that Dodd-Frank rules have needlessly hobbled growth,” consumer groups responded with “skepticism” to the suggestions that they view as “a dangerous relaxation of checks against a cavalier financial system.” The Times added that “some of the proposed overhauls would do away with a requirement for companies to divulge the pay ratio of chief executives to workers, streamline derivatives rules, and give companies more access to capital and investors more places to put their money.”
Small Business Marketing Ad Trade Groups Fire Off Objection To Browser Companies Blocking Ads. (10/17/2017)
Three of the largest ad trade groups have written to the Coalition for Better Ads to argue that browser companies shouldn’t be able to effectively regulate ads by making browsers that block them. Ad Age (10/12, Slefo) reported the Interactive Advertising Bureau (IAB), the Association of National Advertisers (ANA), and the American Association of Advertising Agencies (4As) argue in a letter that any effort to deal with “unacceptable user experiences must be based on industry-wide self regulation.” The report points out that Google’s Chrome will soon include technology to block some ad formats, while Apple has made a similar decision for its Safari browser.
Facebook Security Head Warns Of Fake News Dangers. (10/10/2017)
Bloomberg News (10/7, Frier) reported that Facebook Chief Security Officer Alex Stamos “warned that the fake news problem is more complicated and dangerous to solve than the public thinks.” In several Twitter posts on Saturday, Stamos “cautioned about hoping for technical solutions that he says could have unintended consequences of ideological bias.” His “comments shed light on why Facebook added 1,000 more people [to] review its advertising, rather than attempting an automated solution,” Bloomberg says.
Digital Now Largest Ad Channel, Expected To Overtake Offline Sales By 2019. (10/10/2017)
MediaPost’s Research Brief (10/5, Loechner) reported that MAGNA data show that digital ads have finally “overtaken TV” as the largest ad medium, although “offline” non-digital ads still have the largest spend. Digital ads should command $84 billion this year, up 16% from 2016, according to Marketing Charts, which published the MAGNA data. Research Brief says the trend line suggests digital ad sales will hit nearly $101 billion by 2019, passing offline sales expected to be around $93.5 billion that year.
Twitter Will Test Doubling Character Limit Of Tweets For Some Users. (10/03/2017)
The Drum (UK) (9/26, Stewart) reported that “Twitter has confirmed it is considering a move away from its hallmark 140-character limit, saying it will soon begin testing a 280-character limit for a select number of users across the world.” Twitter “stressed that the change will only apply to a ‘small group of users’ in countries where users are impacted by tweet ‘cramming,’” or the inability to make their languages conform to the character limit. Twitter said, for example, that “the increase won’t be trialed in Japanese, Chinese or Korean versions of the app.”
Facebook IQ Revamps Site As One-Stop Research Portal, With “Discovery Engine.” (09/19/2017)
AdWeek (9/12, Cohen) reports that Facebook IQ has revamped its website to create “an easy-to-access portal for all of its research,” including its “data, white papers and success stories on insights, marketing and measurement from Facebook, Instagram, Messenger and Facebook Audience Network.” A new Insights to Go “discovery engine” is designed to allow users “to filter, find and share relevant insights and data.” The feature also produces slides that “can be shared or downloaded, and the text contained within them can be copied and pasted.”
LinkedIn Survey Finds Members Engage With Brand Content That Helps Them. (09/19/2017)
Social Media Today (9/13, Hutchinson) posts an infographic that shows how professionals engage with content on the LinkedIn platform, based on that company’s own survey of some 9,000 of its members. LinkedIn’s infographic shows that companies and brands have nearly as good a chance of driving engagement at the levels of a LinkedIn member’s own peers if those brands share good content that cuts to the chase. To a LinkedIn member, “good” means “inspirational, relevant content that either makes [them] smarter or helps them perform better at their jobs.” Bucking the mobile trend, LinkedIn content is still consumed primarily on desktops or laptops.
Wages and Benefits Labor Department: Available Jobs Remain At “Near-Record Levels.” (10/17/2017)
The AP (10/11, Rugaber) reported that the Labor Department announced that “US employers are advertising near-record levels of job openings, though the total slipped in August from July.” The number of available jobs “fell 0.9 percent in August to just under 6.1 million,” down from “6.14 million in the previous month.” The AP wrote that while “job openings have risen as the number of unemployed has fallen to the lowest in a decade,” nevertheless “average wage growth has been sluggish, suggesting that companies aren’t offering sufficiently healthy pay to entice workers already employed to switch jobs.” In addition, the AP stated that “companies also pulled back slightly on hiring, and the number of people quitting their jobs also fell a bit,” concluding that “overall, the report suggests the job market was healthy but a little less active in August.”
Trump Tells Donors He Is Determined To Move Forward On Healthcare, Calls Schumer To Work On Deal. (10/10/2017)
Politico (10/8, Isenstadt) reported that President Trump told a group of donors in North Carolina “that he was determined to push forward on healthcare reform – but acknowledged that he was facing serious obstacles in doing so.” Trump “said he wanted to restart the talks” but “two people present for the remarks” said he “underscored the challenges of getting a majority of support for any legislation in the Senate, noting that there was a small group of GOP holdouts who had opposed the repeal efforts.” Several attendees said he “did not rule out the possibility of working with Democrats to get something done.” That followed a tweet on Saturday in which the President said he had called Senate Minority Leader Schumer “to see if Democrats wanted to work together on ‘a great HealthCareBill.’”
Labor Department: US Lost 33,000 Jobs Last Month Due To Hurricanes. (10/10/2017)
The New York Times (10/6, Cohen, Subscription Publication) reported the Labor Department announced the US economy “lost 33,000 jobs in September, the first monthly decline in employment in seven years,” which the Times attributes to “the impact of hurricanes that walloped Texas, Florida and neighboring states.” However, the Times acknowledged “economists discounted the discouraging report, describing it as a blip in a job market that was fundamentally strong.” According to the Times, “some of the good news released by the Labor Department – a drop in the jobless rate to 4.2 percent and a year-over-year gain in wage growth of 2.9 percent – may also have been skewed by weather disruptions.”
WSJournal Urges Court To Bolster Federal Arbitration Law. (10/03/2017)
In an editorial, the Wall Street Journal (10/1, Subscription Publication) urged the Supreme Court to hear challenges to an Obama-era National Labor Relations Board (NLRB) opinion which prohibits arbitration class-action waivers in employment contracts. According to the Journal, the court has repeatedly ruled that the Federal Arbitration Act preempts state laws and court rulings against forced arbitration, and urges the court to reinforce previous rulings on the issue.
Median Household Income Rose By 3.2% In 2016. (09/19/2017)
The Census Bureau said last week that the median US household income increased 3.2 percent in 2016 to $59,039, marking is second straight yearly increase “as the long-running economic recovery generated broad gains in prosperity,” the New York Times (9/12, A1, Appelbaum, Subscription Publication) reports. For the American middle class, the Washington Post (9/12, Long) says, 2016 was the “highest-earning year ever.” According to the Census Bureau, “the uptick in earnings occurred because so many people found full-time jobs – or better-paying jobs – last year.” The Post adds that the poverty rate “also fell to 12.7 percent, the lowest since 2007, the year before the financial crisis hit.” The Wall Street Journal (9/12, Leubsdorf, Subscription Publication) reports that the percentage of Americans lacking health insurance also declined from 9.1 percent in 2015 to 8.8 percent in 2016. USA Today (9/12, Davidson) says the Census Bureau report “underscores that in the final two years of the Obama administration, low- and middle-income Americans made noticeable progress after struggling in the early years of the economic recovery.”
Initial Jobless Claims Unexpectedly Down By 14K To 284K. (09/19/2017)
Bloomberg News (9/14, Chandra) reports the Labor Department announced initial jobless claims “unexpectedly settled back last week,” falling by 14,000 to 284,000 and “underscoring a resilient labor market even as the Atlantic hurricane season introduces added volatility to the figures.” Economists had predicted 300,000 new claims. The less-volatile four-week average “rose to 263,250 – highest since August 2016 – from 250,250.” Bloomberg says, “Applications for unemployment insurance last week were estimated for Florida, Georgia and South Carolina – states that were impacted by Hurricane Irma. Meanwhile, Texas reported an unadjusted 11,800 decrease in filings, following a Hurricane Harvey-related 51,683 surge in the week ended Sept. 2.”