Biden Administration Ends COVID Reqs: Last month, the Biden administration announced that the COVID health emergency, for federal purposes, was concluding on May 11. Additionally, the administration is ending its vaccine requirement that it put in place in 2021 for federal contractors, federal employees, and international air travelers—a welcomed move that many travel associations were pushing for to remove the final barriers to international business travel. Although its no longer a requirement, the administration highly encourages everyone to remain up to date on their vaccination.
Source: The White House
It’s the Economy, Stupid: The Federal Reserve has been trying to tamp down on inflation for more than a year now—chiefly by raising the key interest rates to cool off borrowing—but it still hasn’t been enough to stop the economic train that is the jobs report. The April report, released last Friday, shows that employers added 253,000 jobs to private payrolls, lowering the unemployment rate to 3.4 percent. Although the past two reports have been adjusted downward, they are still in the positive. In addition, wages also increased, which is a mixed bag for business owners who still have customers who can absorb price hikes, but also have to pay higher salaries to their own workers.
So, inflation? It may be hard to believe, but inflation rates have been dropping since a peak of 9.1 percent in March 2022, according to Statista. In March 2023, it reached 5 percent over the previous year, but it doesn’t necessarily mean prices are falling as it’s still well above the Fed’s target of capping it at 2 percent. But good news: April 2023 prices were 4.9 percent higher from a year ago, which was slightly lower than the 5 percent analysts expected, according to data released on May 10 (hey, it was enough to excite stock market trading). Although many economists still predict a recession in late 2023 or early 2024, those predictions have been pushed back numerous times. With the recent Fed rate hike, its 10th since last year, economists hope that any recession we may experience will be mild.
Sources: Bureau of Labor Statistics, Statista, CNBC
Small Businesses Are the Barometer: The National Federation of Independent Businesses, an association dedicated to advocating for the interests of small business owners, reports that their Small Business Optimism Index dropped 1.1 points in April, a downward trend that has continued for the past 16 months. For context, April’s Optimism Index fell to 89.0, which was last seen in January 2013. The biggest two factors, finding employees and the threat of the near-term economic outlook (namely inflation), are likely no surprise to any small business owner. While most owners reported that they didn’t require a loan, two percent of respondents noted that it was marginally harder to secure additional funds in April with higher rates. But it’s not all bad: While inflation remains a top concern, it does show signs of easing, according to the report.
Source: National Federation of Independent Business