• New Data from the NFIB Small Business Optimism Index

    Small Businesses Feeling More Optimistic But This is the 17th Month in a Row Below the 49-Year Average

    There are over 30 million small businesses in the United States, according to the Small Business Administration and small businesses comprise about 99% of all U.S. businesses. Further, about half of all Americans – 48% – are employed by small businesses, meaning almost 60 million employees in the U.S. work for a smaller company.

    Small Businesses Feeling More Optimistic

    On June 13th, “the NFIB Small Business Optimism Index increased 0.4 points in May to 89.4, which is the 17th consecutive month below the 49-year average of 98. The last time the Index was at or above the average was in December 2021. Small business owners expecting better business conditions over the next six months declined one point from April to a net negative 50%. Twenty-five percent of owners reported that inflation was their single most important problem in operating their business, up two points from last month and followed by labor quality at 24%.

    Key findings include:

    • Forty-four percent of owners reported job openings that were hard to fill, down one point from April and remaining historically very high.
    • The net percent of owners raising average selling prices decreased one point to a net 32% (seasonally adjusted), still an inflationary level but trending down.
    • The net percent of owners who expect real sales to be higher deteriorated two points from April to a net negative 21%.”

    Job Openings Still Hard to Fill

    Further, as reported in the NFIB’s monthly jobs report:

    • Owners’ plans to fill open positions remain elevated, with a seasonally adjusted net 19% planning to create new jobs in the next three months.
    • Overall, 63% of owners reported hiring or trying to hire in May, up three points from April.
    • Of those hiring or trying to hire, 89% of owners reported few or no qualified applicants for their open positions.

    In addition:

    • A net 41% of owners reported raising compensation, up one point from April.
    • A net 22% plan to raise compensation in the next three months, up one point.
    • Ten percent of owners cited labor costs as their top business problem.
    • 24% said that labor quality was their top business problem.

  • Weekly Market Outlook

    From interest rate decisions at the Federal Reserve, European Central Bank, and the People’s Bank of China, to inflation and retail sales. I’m Jeff Kleintop and here’s what you need to know for the week ahead.

    Monetary policy is at the top of the list of potentially market-moving events this week. We expect different outcomes – A hold, hike, and a cut. We expect the Fed to hold rates steady at Wednesday’s meeting. The updated dot plot, as well as Fed chair Powell’s remarks at the press conference, are likely to signal a bias towards one more hike at the July meeting.

    Tuesday’s May CPI print is expected to come in at 4.1%, down from last month’s 4.9, but an upward surprise on inflation could prompt a Fed hike this week, as we saw with the surprise hikes from the Bank of Canada and Reserve Bank of Australia last week, after they had paused their hikes in prior meetings.

    The ECB will almost certainly hike rates by 25 basis points on Thursday. That comes despite last week’s revised first quarter data revealing the eurozone is in a recession with back-to-back quarters of negative GDP growth in Q4 and Q1. Though it’s the mildest recession on record; something close to a contraction of just -0.2%. The news of an official recession in Europe cements expectations that the hiking cycle doesn’t have much more to go.

    China’s central bank is likely to cut its one year medium-term lending facility rate by ten basis points on Thursday, the first reduction in nearly a year with the post-zero COVID recovery losing some steam. The economy needs some support and low inflation in China allows for a cut.

    We also get US May retail sales on Thursday, which are expected to decline as consumers are becoming more discerning in their spending as what I’m calling a “cardboard box recession” continues.

  • Retail Trade Corporations’ After-Tax Profits Up in Q1

    Manufacturing Corporations’ Profits are Down in Q1

    The U.S. Census Bureau today announced the following seasonally adjusted quarterly after-tax profits for retail trade industries statistics for First Quarter 2023:

    After-Tax Profits and Sales, 1Q 2023 – Seasonally Adjusted, Retail Trade Corporations

    • Seasonally adjusted after-tax profits of U.S. retail corporations with assets of $50 million and over totaled $36.6 billion, up $5.6 billion from the $31.0 billion recorded in the fourth quarter of 2022.
      •  
    • This is up $1.7 billion from the $35.0 billion recorded in the first quarter of 2022.
      •  
    • Seasonally adjusted sales for the quarter totaled $1,001.6 billion, not statistically different from the $1,002.3 billion in the fourth quarter of 2022 and not statistically different from the $994.2 billion in the first quarter of 2022.

    Manufacturing Industries

    The U.S. Census Bureau also announced today the following seasonally adjusted quarterly after-tax profits for manufacturing industries statistics for First Quarter 2023:

    After-Tax Profits and Sales, 1Q 2023 – Seasonally Adjusted, Manufacturing Corporations

    • U.S. manufacturing corporations’ seasonally adjusted after-tax profits in the first quarter of 2023 totaled $230.5 billion, down $4.1 billion from the after-tax profits of $234.6 billion recorded in the fourth quarter of 2022.
      •  
    • This is down $35.8 billion from the after-tax profits of $266.3 billion recorded in the first quarter of 2022.
      •  
    • Seasonally adjusted sales for the quarter totaled $2,050.4 billion, down $19.7 billion from the $2,070.1 billion recorded in the fourth quarter of 2022, but not statistically different from the $2,019.9 billion in the first quarter of 2022.

    Sources: census.gov

  • Summer Vacation Budgeting

    Tips for Saving Money While Traveling

    How You Can Enjoy the Season without Breaking the Bank

    Summer is the perfect time to take a break from the daily grind and go on a vacation. However, if you’re not careful, the cost of travel can quickly add up and leave you with a hefty bill. The good news is that with some careful planning and budgeting, you can enjoy a memorable vacation without breaking the bank. Here are some summer vacation budgeting tips for saving money while traveling this summer.

    Summer Vacation Budgeting Tip #1: Choose Your Destination Wisely

    The first step in saving money on your summer vacation is to choose your destination wisely. Consider destinations that are less popular or off the beaten path, as these are often more affordable. Look for deals on airfare and accommodations and consider traveling during the week instead of on weekends, as this can also save you money.

    Summer Vacation Budgeting Tip #2: Set a Budget

    Before you start planning your vacation, it’s important to set a budget. Determine how much you can afford to spend on airfare, accommodations, food, and activities, and stick to this budget as closely as possible. Keep in mind that unexpected expenses can arise, so it’s a good idea to set aside some extra money for emergencies.

    Summer Vacation Budgeting Tip  #3: Look for Deals and Discounts

    There are many ways to save money on travel, such as using travel reward points, booking early, and looking for deals and discounts. Consider using a travel rewards credit card to earn points that can be redeemed for airfare or hotel stays. Check with your employer, school, or membership organizations for any travel discounts that may be available. If you’re a veteran, you may qualify for special travel discounts, too.

    Related Article: Financial Planning For Recent College Graduates

    Summer Vacation Budgeting Tip #4: Plan Your Meals

    Eating out at restaurants can be a major expense while traveling. To save money, plan your meals in advance and look for affordable dining options, such as street food or local markets. Consider staying in accommodations that have a kitchen so you can cook some meals yourself.

    Summer Vacation Budgeting Tip #5: Choose Free or Low-Cost Activities

    One of the best ways to save money while traveling is to choose free or low-cost activities. Look for outdoor activities, such as hiking or biking, that don’t cost anything. Visit local museums or parks that offer free admission or take a self-guided walking tour of the city.

    Summer Vacation Budgeting Tip #6: Be Flexible

    Finally, be flexible with your travel plans. If you’re willing to travel during off-peak times or stay in less expensive accommodations, you can save a significant amount of money. Consider taking a road trip instead of flying or staying in a vacation rental instead of a hotel.

    Are You Financially Prepared for the Summer Season?

    For many people, summer is the time to enjoy travel and time off with family and friends. With some careful planning and budgeting, you can enjoy a memorable summer vacation without breaking the bank or veering off the path to achieving your financial goals. By choosing your destination wisely, setting a budget, looking for deals and discounts, planning your meals, choosing free or low-cost activities, and being flexible with your plans, you can save money and have a great time on your summer vacation.

    If you’d like to discuss more personal finance tips or create a financial plan, contact Lane Hipple Wealth Management Group at our Moorestown, NJ office by calling 856-249-4342, emailing info@lanehipple.com, or to schedule a complimentary discovery call, use this link to find a convenient time.

    Illuminated Advisors is the original creator of the content shared herein. I have been granted a license in perpetuity to publish this article on my website’s blog and share its contents on social media platforms. I have no right to distribute the articles, or any other content provided to me, or my Firm, by Illuminated Advisors in a printed or otherwise non-digital format. I am not permitted to use the content provided to me or my firm by Illuminated Advisors in videos, audio publications, or in books of any kind.

  • Weekly Market Outlook

    From interest rate decisions to growth in services; to China’s trade data, and Apple’s big developers conference, I’m Jeff Kleintop with 90 seconds of what you need to know for the week ahead:

    Central banks in Australia, Canada, India, and Poland meet with no change in rates expected but it could be a skip rather than a pause. The markets placed low odds on a Fed rate hike in June, but an over 80% chance by July. It’s still a tale of two economies, with manufacturing remaining in recession territory as indicated by last Thursday’s May manufacturing PMI, while May’s Services PMI is due Monday and it’s expected to continue to show steady growth with headwinds from rate hikes yet to fully hit home.

    The latest beige book in the U.S., covering conditions in April and early May, noted consumer spending was steady or higher in most districts with demand for services like leisure and hospitality still rising.

    China’s PMI figures indicate the new Covid-19 wave not having a major impact, but investors are on the watch for additional stimulus to help boost growth in China in the second half of the year. China’s May trade data due Tuesday are likely to show export growth stalling again, reflecting weaker foreign demand. Chinese post-Covid recovery is already losing some steam and weaker exports will further sap that momentum, adding to the case for government stimulus.

    Apple’s worldwide developers conference takes place this week amid the market’s recent obsession with everything AI. The tech giant’s long-awaited mixed reality headset is expected to be a feature as tech investors seek the next big thing.