Consumer Views on US Economy

America’s economy is currently not in as poor state as some of the commentators are suggesting. When one looks at numbers of hiring, wage increase, and consumer spending the situation is far from bleak. In fact hourly wages increased.

According to the government’s job report at the beginning of this month, employers in America are actually adding jobs.  True, it’s at a lower pace (hiring at 130,000 jobs in August), but it is still happening.   Unemployment figures remained stagnant (as for the last 3 months) at 3.7 percent.   This is almost the lowest number for unemployment in 50 years.  Plus, the longer the good unemployment rate continues, the better for employees as bosses may have to adjust how they work to ensure longer-term growth.  In other words, they will have to provide better packages for workers and invest in training, equipment etc.

Average hourly wages increased by 11 cents last month which marked a 3.2 percent escalation from 2018 figures. Indeed, according to PNC chief economist Gus Faucher:

“With slower, but still-solid job gains and good wage growth, households will continue to spend. The U.S. economy should avoid recession.”

US consumerism is looking good also.  The highest jump in consumer spending in five years was witnessed in the 2019 April-June quarter.  July looked good as well.

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.

A Thriving US Economy

America’s economy is thriving. Or so the numbers tell us.  Here we take a look at some of the figuresthat help us feel optimistic for the future of the US economy.

  1. In Q1 2019, there was an annual growth of3.2 percent.
  2. At the start of Q2 2019, the unemployment rate fell to 3.6 percent(lowest it has been in the last five decades).  
  3. Real wagesof the average Joe in the street increased by 3.2 percent(first time in over 10 years).
  4. Inflationis lower than the 2 percent target at 1.6 percent.
  5. 5.4m+ new jobshave been added since January 2017.

According toYum Brands CEO Greg Creed:

“Obviously the US economy is in pretty good shape. But I also do think that there is some sort of bifurcation going on in the marketplace. There are certainly people making a lot of money, there are certainly people for whom value will remain incredibly important.” 

Although it should also be noted that prices are rising. In the restaurant industry – often in line with the increase in labor costs due to the law on the escalated minimum wage – the large chains are elevating their prices likewise.

More generally, prices are rising in the restaurant industry as labor costs increase with higher minimum wages and a more competitive labor market. McDonald’s, Starbucks, and Chipotle all mentioned raising prices in the most recent quarter during calls with investors.   At the same time, the middle class is becoming smaller.  The Pew Research Centerfound 50 percent of Americans to be in the middle class; quite a drop from the 61 percent figure of 1971.  

There is still of course the quite dramatic gap between top and bottom earners vis-à-vis income increase.  In 2017 the bottom fifth of the population witnessed a very minor increase (2.7 percent belowpre-recession figures) in their income whereas the top fifth enjoyed a much higher one (8.7 percent higherthan pre-recession figures).

Automobile Industries and America

automobile industry

We often hear about US industries that choose to go abroadperhaps looking for cheaper labor, but what about the firms which are now choosing a return to American soil?  Here we take a look at ones from the automobile industry.

The Groupe PSA (French multinational automobile manufacturer of cars including Citroen, Peugeot, Vauxhall) is planning a comeback of its Peugeot brand.  Back in 2016 the firm started working on a 10-year plan to create its presence in North America.  In 2018 it offered a car-sharing service in Washington, DC.  

Within the same industry the Chinese wish to make a presence in America too.  The problem there of course is the ongoing US-China Trade war and the US’s increasing vigilance vis-à-vis Chinese technology.  Despite this, Americans are really starting to favor electric vehicles with government policy promoting eco-friendly cars.  according to GAC Motor President, Yu Jun, the firm’s “ultimate objective is to build the company into a world class brand and a global player,” which would obviously benefit from the creation of a presence in the US.  

Yun really believes that the his brand will ultimately win over the Americans despite the politically-economic issues.  Indeed, the company’s Entranze electric concept car was unveiled in Detroit at January’s North American International Auto Show held in Detroit and received well. Entering the US market in 2015, Yu pointed outat the show that the firm has since “been making steady progress” in the US market.

Then there is Volkswagen. supporting approximately 16,400 jobs in Tennessee via the Chattanooga assembly plant and other impacts, a substantial amount of revenue is being generated from the firm.  for example, in 2017 Tennessee took around $73.8m in state and local taxes.  It was good for Volkswagen too since its economic output in Tennessee was approximately $8.56 billion in 2017.  

So for automobile industry workers, the US economy is really working!

Hedvig Hricak & Colleagues Honored by National Academy of Medicine

Three members of the National Academy of Medicine were recently honored for their outstanding service. As the National Academy of Medicine President Victor J. Dzau explained,

“These distinguished members have shown extraordinary dedication to furthering science and improving the health of our nation. The countless hours they have volunteered in various roles year after year have been crucial to helping the National Academy of Medicine address critical issues in health, medicine, and related policy, and inspire collective action across sectors. We are delighted to honor them today.”

The three doctors included Elaine L. Larson, Hedvig Hricak and Nicholas Peppas. Here are a few details about each of these distinguished medical leaders.

Elaine L. Larson: She is a professor of epidemiology at Columbia University and she has been a member of the National Academies of Sciences, Engineering, and Medicine since 1986. During that time, she has served on more than 50 projects and 17 committees, councils and boards. She was awarded with the Walsh McDermott Medal for her distinguished service with the National Academies of Sciences, Engineering, and Medicine for an extended period of time.

Hedvig Hricak: She is the chair of the department of radiology at Memorial Sloan Kettering Cancer Center. Since she was elected in 2002, Hricak has worked tirelessly for NAM and National Academies with her work with many committees and symposia. She was awarded the David Rall Medal which is awarded to someone who has shown distinguished leadership as the chair of a study committee or with another National Academies activities. She has shown commitment above and beyond what is expected. As a prepared statement said, “Through her exemplary service over about 15 years, Hricak has treasured the NAM as a valuable stimulus for improving science in medicine, the quality of health care, and the state of public health in the U.S. and around the world.”

Nicholas Peppas: He is a professor and director of the Institute for Biomaterials, Drug Delivery, and Regenerative Medicine and Cockrell Family Regents Chair in Engineering #6 at the University of Texas at Austin. He has received more than 150 awards and he has been elected to several domestic and international societies. He received the Adam Yarmolinsky Medal which is given to a member who comes from outside the health or medical sciences and has shown real commitment to the mission of NAM.

Good News for US Economy

The US economy is doing well. It’s a fact. If numbers are anything to go by that is. A recent US Census Bureau Report. 2017 witnessed the highest levels on record of middle class income (to $61,372 for median household – an increase of 1.4 percent from 2016) with a simultaneous decline in national poverty rate (a drop of 2.5% from 2014). Millions of US residents have found jobs again as the deep recession has subsided and thus having two people in a family home work again is a huge contributing factor to these figures.

Caution is still needed however. According to a recent article in The Washington Post debating these figures, there are still many problems:

“While the poverty rate is now at the lowest level since 2006, it is still a full percentage point above the rate in 2000, the last time unemployment was this low… The poverty rates for African-Americans and Hispanics also remain substantially higher than for whites and Asians although the unemployment rates for African-Americans and Hispanics have come down swiftly. Twenty-two percent of African-American households and 19.4 percent of Hispanic households live in poverty compared to 11 percent for whites and 10.1 percent for Asian-Americans, the Census Bureau reported.”

Yet at the end of the day the above figures are still worth celebrating. There is a general consensus that the best way of testing the fiscal status of a typical middle class home is via its median household income. And the Census shows that growth.

LG Makes First International Robotic Investment in Bossa Nova

LG Electronics has made its first major international investment in US-based Bossa Nova Robotics. The Korean company invested $3 million in the robot developer as part of their efforts to expand in robotics.

LG has stated its intentions to become more competitive in the robotics industry across the globe, and has made several large investments in South Korean robotics already, in companies including SG Robotics, Robotis, Acryl and Robostar. It’s investment in Bossa Nova Robotics was its first big step into the overseas market. The American company has an impressive track record, with over 50 Walmart supermarket chains relying on their supply.

The Korean tech leader has also showcased several robots, including a sophisticated guide navigation technology at Incheon International Aiport. The company now plans to focus on AI and self-driving technologies.

Nestle Teams Up with Starbucks to Boost International Standing

Switzerland-based company Nestle has recently signed a treaty with one of its biggest competitors: Starbucks Corp. Nestle will be paying $7.15 billion in cash for the Starbucks business, which has annual sales of up to $2 billion, and plans to market the chain’s consumer and food-service products internationally. The arrangement does not include Ready-to-Drink drinks or the sales of products within Starbucks coffee shops.

The move comes as part of Nestle’s recent mission to attract higher-end coffee enthusiasts. Mark Schneider, Nestle CEO, said: “With Starbucks, Nescafe and Nespresso, we bring together three iconic brands in the world of coffee.”

Several hundred Starbucks employees will join the Nestle team, and will continue to operate in Seattle, Washington, once the agreement closes by the end of this year.

According to Bloomberg, “Nestle has been bolstering its presence in the U.S., and last year added niche brands Blue Bottle Coffee and Chameleon Cold-Brew to expand its portfolio. Nespresso has introduced a machine that’s more attuned to American’s preference for bigger cups of joe three years ago.”