Economic Optimism: News and Views
What are people’s thoughts on the current status of the US economy? Is there more of a leaning toward optimism or pessimism? Here we take a brief look.
According to a June study from the NFIB (National Federation of Independent Business), people are pretty optimistic about the economy. The finding was that:
“While optimism remains at historically high levels, the June figure reverses the gain posted in May, with six components falling, three improving, and one unchanged. The Uncertainty Index rose substantially, increasing seven points to the highest level since March 2017. Last month, small business owners curbed spending, sales expectations and profits both fell, and the outlook for expansion dampened. When you add difficulty finding qualified workers and harmful state-level laws and regulations, you’re left with a volatile mix where uncertainty has increased to levels not seen in more than two years.”
Vis-à-vis employment in Mid-America, according to Ernie Goss, PhD, director of Creighton University’s Economic Forecasting Group and the Jack A. MacAllister Chair in Regional Economics in the Heider College of Business, Omaha, Nebraska:
“Since December of 2018, the national employment growth rate has been approximately three times that of the region. Not surprisingly, approximately 40 percent of supply managers reported the shortage of qualified workers was the greatest economic challenge for their company for the next 12 months,” Goss said. “Due to shortages of workers in the region, U.S. Labor Statistics data show that the average regional hourly wage rate rose by 4.8 percent over the past 12 months, well above the national gain of 3.1 percent over the same period of time.”
Educating Women: Family Finances
Why are women in America so uneducated on their personal household finances? Why are statistics showing – even today – that when it comes to divorce or widowhood, women are not educated as to what their personal finances are? With so many women in top executive positions in various industries (even economic ones), the gap on education in this area is still broad.
Michelle Smith divorce expert is CEO and founder of NYC’s Source Financial Advisors, an RIA (Registered Investment Advisor) and a CDFA (Certified Divorce Financial Analyst). She has been working in the field, advising women on this issue for the last 15 years. Source Financial Advisors currently manages $420 million in assets and works with divorcing couples, 85% who are women.
Over the years Smith has found that many women who file for divorce or who are suddenly widowed have had no control over the money in the marriage and assets the couple own are completely foreign to them. In recent years there has been a substantial increase in the amount of what has been coined the “gray divorce” (people over 50 filing for divorce) that is adding to the financial burden and stress, again primarily of women. Smith echoed this when she reported that she had been “seeing more and more older people divorcing [given the increase in life expectancy, these people are] unwilling to stay unhappy” for longer.
The financial side for women who survive their husbands or are divorcing is terrible – no matter what age or stage. There is so much to do (irrespective of the emotional side) with finances when one gets divorced. Smith has found that the transitional process requires the suddenly-single woman to “become a CFO.” As such she formulated a process for these individuals. “Wife2CFO” is a system she developed to aide women in the divorce process. “About two years ago, I literally woke up in the middle of the night and I saw the letter ‘F’ connecting the word ‘wife’ to CFO and so I immediately trademarked it,” she said.
Ultimately given that the rate of divorce after age 50 has doubled in the U.S. since 1990, and one out of two couples will end up divorced (which doesn’t even take into account the amount left widowed), it is time for women to get a full education on where they stand.
America’s Economy: Amazing Growth
Just last month 224,000 new jobs were created in America; that figure is more than twice than was needed to maintain workforce progression. Growth of GDP per person has increased by 1.5 percent per year and over the last decade has increased by a 3.3 percent average annually.
At the end of this month it will have been 121 months that the US economy has been in a state of consecutive growth. According to the National Bureau of Economic Research (NBER), this is the longest stretch of time since 1854 that the economy has encountered such growth.
Given that the US economy is responsible for 25 percent of global output, if it keeps growing like this, it could be “time to rewrite the rules for how all rich economies behave.” America is certainly not an island (economically) so if the countries it trades with encounter a recession it will impact the US as well.
Tribute to Bauhaus School
A tribute to the centenary of the establishment of the Germany’s Bauhaus school is being held in Tel Aviv. Photographer Mozes Victor Konig is thrilled to have been able to check out the exhibition that is being held at the Diaghilev Hotel at The Gallery from June 13 until July 27.
“I read about Less Is More: Israeli Art Homage to Bauhaus in an entertainment journal online. Given that my father’s mother originated from Weimar before escaping the Nazis, I thought it would be fitting that I visit the event that is happening in our land,” Konig explained.
“As an artist of sorts myself, I was most impressed to learn the history of the school which is very arts-centric, using both fine art and craft arts. Even more so because this type of art has had a very strong influence on design and architecture right here in Israel.”
Exhibit curator is Ilan Wigan and some of the participating artists include: Liat Elbling, Ohad Meromi and Nahum Tevet.
Strength of US Economy
In this video, Bloomberg’s International Economics and Policy Correspondent Michael McKee discusses how President Trump is “taking the credit for [the US] economy’s performance.”
Growth of US Economy
There are so many conflicting reports about the growth – or lack thereof – of the US economy. Here we take a look at some of those and try to present them in a way that the reader can come up with their own conclusion.
In Q1 2019, there was a growth of 3.1 percent in the economy. While there has been a slight deceleration in job hiring, jobs have still been added for more than 100 consecutive months. Plus this month we are seeing more expansion than even that of the 1990s boom, making it the longest stretch of time of continuous growth.
According to economist Todd G Buchholz:
“There is a dirty little secret in economics today. The United States has benefited – and continues to benefit – from the global slump.”
Even though there is currently a Brexit-fed-UK crisis; a French yellow-vest-unrest and a Chinese fear of foreign market bombardment, this global turbulence is not impacting America in the way one would imagine.
Indeed, in 2018 when the US economy grew by 2.9 percent it was unrivalled by its European counterpart that pulled in a mere 1.8 percent in economic growth. Buckholz puts some of this down to the “sluggish GDP outside of America…low interest rates and weak inflation…puny looking yields on bank certificates of deposits (CDs).”
Bolstering Entrepreneurs
New business individuals and those wanting to become successful entrepreneurs often need a bit of a boost as they begin to navigate their way in their industry. It’s not easy breaking into it. Here, we look at some of the recent endeavors that have been engineered by politicians and those who have been through the same thing of getting started and maintaining a new business
Presidential candidate Elizabeth Warren recent proposed legislation to allocate $7 billion in federal grants to aid entrepreneurs in minority groups looking to start their businesses. Her idea is to administer the program by a newly created department – of Economic Development – which would replace the current Commerce Department. If created this agency would take on the work of both the Patent and Trademark Office and the Small Business Administration. And it would develop into a Small Business Equity Fund which would be in charge of enforcing conflict of interest rules, assembling information on outcomes, etc.
Residents of Maine are used to small businesses; they are one of the driving forces of the economy. They all began modestly also; a struggling individual trying to make money from an idea. But now there is something to really help them. Startup Maine is an organization and an event (that was held in Portland last week) on teaching would be entrepreneurs how to make themselves attractive to investors; how to begin a crowdfunding campaign; to create a company that makes a profit; to develop a firm that serves a community, etc. Startup Maine tries to network entrepreneurs with business investors and people who have had experience in this area.
In Louisville, a group has gotten together to facilitate women in their work toward becoming business leaders. Cliff Elgin Insurance created Network of Entrepreneurial Women nearly a decade ago. According to one of his clients Lynn Cooper:
“He saw a need for creating a group of women that could work together and help each other and network. [Being a female entrepreneur back then was very hard and] “When I first started going about five or six years ago it was a lot of men in suits and it was very intimidating.”
Today the organization focuses on networking and helping the entrepreneur individually, also trying to help them find a work-home balance. Members meet once a month.
Increase in Retail Spending
May 2019 saw an escalation in spending by US shoppers. This had provided “critical fuel for the U.S. economy’s continued expansion despite trade tensions and slowing global growth.” According to the US Commerce Department, the increase in retail stores was 0.5 percent from April to May. There was an increase in April too which was slightly higher than the department’s estimate. All of these figures show that household spending is high and on the up.
Other good news is that almost all categories (in particular auto sales at 0.7 percent) showed improvement and real gains. There were some declines (within the food and beverage industry, as well as apparel, department stores and the like) but overall the message was growth. Electronic stores possibly had one of the best months with an impressive growth of 1.1 percent in May. Health, wellness and personal care jumped too. Another high gainer was “nonstore” (online, catalogue, direct) retail sales, with a statistic growth of 1.4 percent for May.
According to a recent Market Watch article, this:
“may allow the Federal Reserve to wait a bit before cutting interest rates. After the weak job report for May, some economists thought the Fed might ease as soon as next week to bolster what was perceived as a slowing economy. The market is now expecting the Fed to cut rates in July. Some prominent economists, like the team at Goldman Sachs, think expectations of a rate cut over overdone and the central bank will remain on hold this year.”
The hope of course was that this trend would continue but earlier this month it seemed that “renewed trade tensions tapered optimism and smaller gains in employment suggested slower economic growth.”
America’s Current Economic Status: The Sweet Spot
According to this Bloomberg panel discussion, America’s economic status right now is in a “sweet spot.” The US economy is going well. Economist Constance Hunter explains.