U.S. Registries – Linking buyers and sellers across North America

Author: tprusr

AI, The Fourth Industrial Revolution, and the Future of Jobs

Like a scene out of the latest sci-fi movie, the robot armies are coming. And while it is generally accepted that they will be friendly to humans, they bring with them an undercurrent of danger. They will arrive initially to serve mankind, to perform tasks considered too mundane or harmful to human health. But as they get smarter, their ambitions may grow, until the next thing you know, they’ve stolen your job!

Sound far-fetched? Far from it. The very near future is likely to bring with it a landscape populated with ever increasingly sophisticated computers and robots. As technologies like artificial intelligence (AI) and machine learning mature, the capabilities of these devices to perform more “human-like” tasks will increase exponentially. The economic impacts of this coming revolution could be dire if the technology is not managed properly. Many experts are predicting that future generation AI-driven robots will essentially be able to perform any task that humans can do today, from driving a bus to operating on a patient. The question then becomes, what will humans do in a world without work?

The threat to the economy is very real. According to the World Economic Forum, jobs lost to AI-driven automation could number 5 million by 2020. And another report, co-authored by Citibank and the University of Oxford Martin School, predicts that in the US alone, a whopping 47% of jobs could be at risk.  Even if these worst-case scenarios don’t come to fruition, the disturbances to the global economy as a result of AI-enabled automation will certainly be profound.

Governments and businesses alike need to consider the ramifications of the coming ‘Fourth Industrial Revolution’. Advanced automation will result in a sea change in the way organizations both large and small conduct business. And society as a whole will need to decide how to best harness this technology for the greater good of humanity, rather than allowing it to spawn economic hardship and inequality.

 

 

 

Continue Reading

Cost Saving Tips and Tricks for Small Businesses

Time to cut cost

Every business owner, especially small business owners, are looking for new ways to save more money, be more efficient, and ultimately as a result increase profits. Let’s explore some ways that small business owners can save more of their hard-earned money!

Get Rid of The Paper

Paperless offices are the way of the future. Thanks to an array of business technologies it is no longer imperative to have paper copies of everything. Document scanners allow businesses to share and send documents instantaneously and they save them on printing and storage costs while making the office a more efficient place overall. This also includes offering your customers electronic invoices.

Think About Leasing

When buying equipment for your office consider leasing it instead of purchasing it outright. Not only do you avoid spending a lot of money upfront for the equipment, but you also will save on maintenance and repair costs too since most lease agreements will also cover these expenses.

Collect Upfront

Collect a portion of cash upfront from the customers that you extend credit too. It doesn’t have to be a substantial percentage, but if you collect even say 25 percent upfront from your credit customers you minimize your risks, improve your overall cash flow, and save money in your collection efforts.

Payroll Debit Cards

Issuing payroll debit cards instead of cutting checks every pay period is a great way to save money on administrative costs since the expense of cutting checks is cut out, and you lower risk of fraud, which is a major benefit since according to the Association of Certified Fraud Examiners 60 percent of all fraud incidents within a business involve employees.

Get Listed!

Getting your business listed in online directories, like the North American Trade Registry,  is a great way to make your business more efficient in terms of drawing more customers organically without spending too many of your resources on marketing efforts. Using trade registries is also a great way to generate more sales leads!

Continue Reading

Gone Viral!

Old gone viral sign.

Old gone viral sign.

Video marketing and graphic animation, once a luxury reserved for big business, is an increasing necessity for small business, Graphic and video content engages customers and communicates your message better and faster than any other medium, according to the Rhode Island Small Business Journal (RISBJ). The reasons are simple: the human brain processes visual information 60,000 times faster than the written word while also engaging viewers on a “human level.” Recent statistics reported by Invisia corroborate the efficacy of video marketing, citing increases in conversion up to 80% on website landing pages and 20% or more on website home pages.

Before small businesses list in B2B Directories like the free US Registries, it is good business to have marketing plans in place, strategies for capitalizing on increases in incoming leads, and websites updated with engaging, informative information. Visit the US Registries website at: http://www.northamericantraderegistry.com.

Small business owners often state that graphic animation and video content isn’t apropos to their industry, according to RISBJ. But the medium’s power to engage, tell a story about products and services, and humanize your business is proven. A quick look at some of the websites listed on Forbes Best Small Companies In America, 2016 reveals how video content and graphic animation is utilized across industries to engage customers. From venture capital to manufacturing to consulting to banking to B2B, graphics and video tell the story and bring products and services to life.

Graphic Animation and Video Content: Use an Agency or Produce Yourself?

Most advertising and PR agencies offer high-quality, professional video and graphic animation services. While these services can take a large bite out of small business marketing budgets, 73% of businesses incorporating video into their marketing campaigns “report positive results to their ROI,” according to Invisia. Small Business Trends (SBT) recently reviewed Slidely Promo social video creation platform as an alternative for small businesses. In partnership with Getty Images, Slidely Promo lets businesses “create instant, stunning promotional videos for social platforms” for as little as $49 per month, according to SBT.

To learn more about inexpensive video and graphic animation using Slidely Promo, visit their website: https://slide.ly/prom

 

 

Continue Reading

How Brexit will effect U.S. Businesses

The United Kingdom’s controversial referendum and impending withdrawal from the European Union (commonly referred to as Brexit) caused shockwaves around the world. Ushering in turbulence and volatility in the European marketplace, the British exit will carry economic implications well across the pond, affecting U.S. businesses large and small.

As reported by CNN.com, Janet Yellen, chief of the U.S. Central Bank and a top monetary policy setting official, warned that Brexit “would negatively affect financial conditions and the U.S. economy.”  And however dire that proclamation may be, small businesses in the U.S. may find that there are some positive effects among Brexit’s negative.

The Positive:

  • Businesses may anticipate a brain drain from the United Kingdom whereby educated professionals move to the U.S. in order to pursue their careers. This influx of Brits would result in a more competitive labor market, creating opportunities for U.S. businesses to hire top talent.
  • Due to higher risk and lower interest rates, more money from Europe will be invested in the U.S. market. Businesses may be wise to seek out foreign capital or investment for their business.
  • The E.U. may relax some of the strong regulations that prompted the U.K.’s exit after similar campaigns for referendums have begun cropping up from politicians in other European countries. Decreased regulations may allow U.S. businesses that were previously unable to participate in the E.U. marketplace, opening a new population of  European consumers to their products.

The Negative:

  • As would be the case with an influx to the talent pool, the competition in many different niches for U.S. businesses may increase as British business owners seek to move operations.
  • According to Willie Schuette of The JL Smith Group, should the duplication of the U.K.’s current trade deals not occur, small businesses may be forced to “separate European distribution; meaning lower margins and higher shipping costs.” Further, contractual agreements “will be impacted” as “new rules, agreements and laws” are rewritten.
  • Small businesses have to adjust plans to account for long-term uncertainty regarding the actual effects of Brexit, which could take up to two years to finalize. Jeff Stibel, Vice Chairman of Dunn & Bradstreet, described how businesses typically operate well in good economic times and have created back-up plans so that they may survive the tough ones, however “[businesses] are uniformly bad at operating in times of uncertainty.”
  • The British pound has fallen after Brexit, while the U.S. dollar rallied. Although a strong dollar is good for American travelers, it will cause U.S. products sold overseas by businesses to be more expensive, and thereby less attractive to consumers.
Continue Reading

If the data say no, can the Fed really go?

NAROFF ECONOMIC ADVISORS, Inc.

Joel L. Naroff

President and Chief Economist

INDICATOR: August Retail Sales, Industrial Production, Producer Prices and Weekly Jobless Claims

KEY DATA: Retail Sales: -0.3%; Excluding Vehicles: -0.1%/ IP: -0.4%; Manufacturing: -0.4%/ PPI: 0%; Excluding Energy: 0%/ Claims: +1,000

 

WHAT IT MEANS:  If you have missed my economic missives, it was because of the dearth of information.   Well, today, the economic data mills released a ton of numbers and they all seemed to say the same thing:  Not much is happening in the economy.  August retail sales were pretty soft, but we knew that would be the case from the decline in vehicle sales.  However, even excluding vehicles, sales were down.  People did eat a lot, both at home and in restaurants, and back-to-school clothing sales were good.  But that was about it, as almost every other major category was either flat or down.  Electronics and appliances did eke out a small gain.

 

With households not buying, manufacturers stopped producing.  Industrial production fell in August as manufacturing output declinedEight of the eleven durable goods producing industries and seven of the nine nondurable components were either flat or down.  Why there was such a major retrenchment is strange in that the numbers looked like something we would get when the economy was in a major downturn.  You know something is weird when the strongest sector was oil and gas production.

 

If the Fed members were hoping to see inflation pressures starting to build, their wishes were not granted.  The inflation genie is still in the bottle as the Producer Price Index was flat in August.  Energy prices fell sharply, but even excluding energy, wholesale costs went nowhere.  About the only positive aspect of this report, at least for the Fed, was that goods inflation has finally flatlined.  With services costs rising, wholesale prices could increase, year-over-year, going forward.  And as far as the pipeline is concerned, intermediate level, non-food and energy costs are firming.  That hints at slowly rising inflation as well.

 

The one truly positive number released today was unemployment claims.  They rose minimally and the level remains near record lows, when adjusted for the labor force.  The labor market is tight and firms are just not cutting staff.  

 

MARKETS AND FED POLICY IMPLICATIONS: We will find out next week if the Fed is really data dependent as the recent numbers hardly argue for a rate hike.  Vacations and a hot August may have depressed activity, something we will not know until the September numbers are released.  Of course, those reports will not be released until after the meeting.  The economy is moving forward at the pace we have seen for the past few years.  The string of roughly 1% growth rates should be broken this quarter, but that would just start bringing us back to 2%, which most economists think is underlying the growth rate.  The recent disappointing data places the Fed in a difficult position.  If the FOMC raises rates, then it would give lie to the argument that the Fed is data dependent.  If the Fed is data dependent, then the next time a hike would likely come is December, since the November meeting ends six days before the election.  It looks like the Fed will have missed another opportunity to start the normalization process because the “data dependent” argument has placed the members in an untenable position.  Maybe they should just drop the phrase.  It’s dumb, as the data are so volatile, and weak numbers box in the members. With strong data, the Fed doesn’t need an explanation, as the markets will be expecting, if not demanding a move.

 

 

Continue Reading

2015 saw nearly 1,000,000 international students coming to the United States

The world is crossing borders at record speeds. International tourism receipts are increasing, on the back of a strongly growing global middle class and a steady rise in visa-free travel: above average growth for six years straight; and for the fourth year in a row, global tourism spend has grown much faster than merchandise trade. The rise of China is dominant here, with 120 million Chinese now traveling abroad every year; a trend showing no sign of slowing (interestingly, around the world, only tourism from the former Eastern bloc is significantly shrinking). It’s also developed world interest in ever-more global destinations: even North Korea’s repeated arrests of visitors has not deterred westerners from reaching as far as the hermit kingdom.

The same trend holds for international students. 2015 saw nearly 1,000,000 international students coming to the United States (by far the most important destination for higher education); a 10% year-on-year increase, and the fastest rate of growth since 1979. The rise of China again drives the trend; making up 31% of the total foreign student count (India has 14%, Korea 7%, and Saudi Arabia 6%).

 

Continue Reading

FED OFFICIALS CALL FOR MORE “INFRASTRUCTURE” INVESTMENT?

Bill Dunkelberg, Chief Economist

National Federation of Independent Business

Talk at Aspen was cheap as it always is, with government officials, past and present, calling for more PUBLIC investment in infrastructure, education, training and the like and everyone looking for clues about the direction of monetary policy.  The Fed has become the dominant factor driving financial markets, “follow the Fed”.  So, PUBLIC investment is the key to raising productivity and stimulating the economy?  The last attempt to do this with “shovel ready projects” (which didn’t exist) misfired badly.

 

“Roads and bridges”, yes, there is a great need to invest, some of this is federal (highways) but most of it is in the province of state and local governments whose resources have been drained by slow growth, lower tax revenues, increased welfare payments, unemployment benefits, pension shortfalls, rising public employee costs, and flight from efforts to tax consumers and private businesses to make up the deficiencies.

 

As a stimulus, this is a poor choice.  Planning and permitting lags are long, and this is a capital intensive business, requiring massive amounts of heavy equipment, not of workers.  Environmental regulations pose major barriers to progress in these area.  We tried this before and it didn’t work.

 

“Education and training”, yes, education needs to keep pace with a fast changing job requirements.  However, this is not well done by managing education from a large office building in Washington D.C.  Innovation is stifled by local politicians and teachers unions and certainly isn’t taught or encouraged in public schools.  Educational costs go up but results do not.

 

Short on revenues, governments at all levels are relying on debt to pay for what little they do.  This will only have an unhappy ending as many of our cities have already discovered.  Federal spending increases would also be funded by debt because the federal government always runs a deficit, so more spending means more debt (unless taxes are raised).  In the late 1990s, surpluses were run and debt paid down under the control of a Republican Congress and a strong economy (which the Fed cannot produce).

The real source of productivity gains is the private sector, driven by private innovation and investment in real capital assets (snowplows vs shovels to move snow).   This is not the province of Washington D.C.  What Washington D.C. does do is tax away the earnings that private firms use to finance growth, and impose “redistributive” regulations on firms that waste private resources (including time) and lower the prospective return on investments.  Compliance costs in financial and educational institutions for example impose large demonstrable costs but real benefits for consumers are less clear.  “PC” has become expensive, colleges and universities have very expensive offices devoted daily to these issues, but benefits are less than clear.  Meanwhile, tuition rises.

 

Hiring a worker has become increasingly expensive, paperwork, compliance, taxes, the minimum wage, mandatory health insurance, sick leave and family leave, legal liability, complexity in wage and salary administration, FLRB rulings on unionization etc.  Employers are motivated to find a way to hire fewer workers by the government or prevented from hiring workers by the minimum wage.

 

Interest rates are historically low and large firms have billions in cash stashed away.  Why won’t they spend it, particularly on new equipment and expansion?  Investment in plant and equipment is all about the future, including the decision to “replace” worn out capacity.  It is obvious, then, that business’ view of the future is not particularly positive.  Cash has been used to repay debt, buy back shares, pay dividends, and acquire existing firms, but not much investment in new assets.

 

The process is simple, expected profits or cash flow from an investment are calculated and discounted by an appropriate discount rate which incorporates market interest rates and a risk premium related to the probability that the project will successfully produce the expected returns.  Any stream of expected returns will look better if interest rates are lower.  When market interest rates are so low, it is the risk premium that dominates.  The higher the Discount rate, the lower the estimated value of the investment.

 

Discount Rate = Real rate of interest + Expected inflation + Risk premium.

 

The Risk premium (will the bond be repaid?) that financial markets place on a bond issued by a particular company for a certain maturity can be calculated from information about the price of the bond and the terms it offers using current market rates.  For equities this is not the case, but implicitly the purchaser of stock makes this computation for expected profits.  For greenfield investments (plant and equipment) the choice of the Risk premium is even more subjective.  It depends on the expected course of the economy, regulations specific to the investment, the economic performance of customers, tax policy and the Fed.  All uncertain.

 

The Fed has driven rates on risk free assets to near zero levels, inflation rates are below 2% and consumers expect them to stay low for a long time (University of Michigan).  This leaves the Risk premium which must be very large to discourage investment with such low capital costs.  Uncertainty, measured by the National Federation of Independent Business, is at its highest level in 40 years.  Except for weak sales and the economy, “political climate” is the second most frequently cited reason for not expanding a business and is at a record high level.  Uncertainty about the economy and Uncertainty over government actions ranked fourth and sixth out of 75 problems that small business owners were asked to prioritize in an NFIB survey this year.

 

The Fed laments the weakness in direct investment spending, but fails to understand that its policies have produced a major miss-allocation of funds and are one of the major sources of uncertainty that keep the Risk premium high, discouraging risk taking and investment.

 

fed1 fed2

Continue Reading

It’s hard to be a member of the middle class if you don’t have a job.

THE GOVERNMENT’S WAR ON JOBS

Bill Dunkelberg, Chief Economist

National Federation of Independent Business

There is one law that the Supreme Court and Congress cannot fundamentally alter and that is the law of demand: the higher the price of something, the less of it will be taken. Sometimes immediately, sometimes over a longer period as markets and firms adjust. The “price” of something is more than just the “tag price”, it also relates to the difficulty of acquiring it and all related costs. In the case of labor, it’s more than the wage, it’s all the associated search costs, paperwork, employment taxes, training costs and the mandated benefits that determine the cost of an employee.

There is a second important principle: firms cannot pay workers more than the value they bring to the firm (and stay in business). Every time the cost of labor is increased, whether by market forces, or increases in the minimum wage, or mandated family or sick leave, or more labor taxes or paperwork, the hurdle an employee must get over in order to have a job rises. The most damaging impact of a higher minimum wage on our economy is not the increased labor costs, but all the job opportunities that are eliminated forever for young and unskilled workers who want to enter the labor force and become productive workers.

Yet liberals can’t be more proud of all the measures they support, federal, state and local, that raise the cost of entry into employment, including supporting unionization, which is the power to use monopoly power to tax ordinary consumers by raising labor costs, imposing costly work rules, and adding red tape. Yes, auto workers lived very well (and retired well) in the good old days when $1500 in the price of a car went just to fund their medical insurance in addition to the excessive wages paid, all included in the price of the car. So customers paid a heavy tax so the union workers could live well. Competition ended that, GM failed and lives today only with a $10 billion dollar subsidy from taxpayers and continued profit tax breaks engineered by the Obama administration.

Competition has cut much of this “tax” on the customer, and unions now cover only about 7% of the private workforce. Their new “sweet spot” is in the public sector where “profit” is not measured and managers are not accountable for the bottom line. GM failed but your local city or state government is not likely to (although a few have managed even that). Here, 35% of the workers are unionized and often guaranteed jobs (tenure, civil service etc.) and their tactics are the same, inflict pain on the customers until the public sector mangers cave under pressure from constituents (no garbage picked up, schools not in session, buses don’t run etc.). Taxpayers take the hit here as well.

The Liberal’s push for a higher minimum wage is also a “tax” on customers. There is no new income in a market when the minimum wage is raised. Every dollar a minimum wage worker receives comes out of the pockets of customers and owners as prices rise to pass on the costs. Few poor people are helped, most officially poor people don’t work and would find it even harder to get a job at a higher minimum wage. Most of the earnings gains from a higher minimum wage go to families with above median incomes, not the poor. Meantime, job opportunities are destroyed and more and more unskilled and young are denied opportunities to get their first job (and on the job training) and become productive members of the workforce. Only people who don’t “think it through” believe that government wage setting is a good idea. A recent report from Professor Mark Perry at the University of Michigan illustrates the impact of a recently implemented $15 minimum wage in Seattle. You can bet that most of the decline in employment was concentrated among the young and unskilled. And those job positions are lost forever (as long as the minimum wage is at $15 or higher). Now Seattle’s city council is deliberating the setting of work schedules for private sector employees.

war_on_jobs

It is hard to be a member of the “middle class” if you don’t have a job. So, how are all of these “liberal” or “sounds really good”, “fair” policies working? Today, the percentage of the adult population (age 16 and over) with a job is 58%, down from 64% in 2000 (the record high) and 63% in 2007. The percent of workers working part-time that want a full time job is 20%. The black unemployment rate is 11%, 33% for 16-19 year olds. These people aren’t helped by a higher minimum wage, they find it even harder to get a job as it rises. The percent of the population receiving welfare payments is over 25%. Food stamp recipients are at record high levels. The poverty rate is the highest since the early 1990s. Having a job is a much better alternative, for the person and for the good of the country. President Obama wrote recently “Access to a job in the summer and beyond can make all the difference to a young person-..”

Continue Reading

The Net Worth Bubble, Losing Air.

Bill Dunkelberg, Chief Economist

National Federation of Independent Business

 

 

American consumers have about $14 trillion in debt and a net worth of over $80 trillion according to the Federal Reserve. Net worth is the sum of the values of all assets, real and financial, that consumers own, less their debt, including mortgage debt, leases, credit cards and the like. The wealth we hold is a way of storing purchasing power. You can sell your shares of Apple and buy “stuff”, goods and services. Ultimately, for most consumers, that’s what our wealth is used for, to acquire “stuff”. Some of our assets provide services directly such as our houses and cars. The real services received from these assets would seem to be unchanged over time even though their market prices vary.

Consumer Net Worth vs GDP

Financial assets do provide an income that can be used to buy stuff (although interest income was dramatically reduced by Fed policy, dividends held up reasonably well). And part of the goal of Quantitative Easing was to induce people to buy more stuff (real goods and services) as their asset values were inflated by Fed policy. On first blush, not much of this seemed to occur. That said, the total value of our net worth represents a potential claim on stuff, the real output of our economy.

The broadest measure of “stuff” is the Gross Domestic Product, the total value of final goods and services produced in a given period of time. Constructing the ratio of Net Worth to GDP illustrates the fluctuation of claims on output per dollar of output produced. Not surprisingly, this was a fairly steady series for 25 years (maybe longer) from 1970 to the mid-1990s as gains in nominal wealth were matched with gains in nominal output, averaging about $3.50 in claims on output for every $1 of GDP. The advent of the dot.com era (and Y2K) drove the ratio up to $4.40 and then the housing bubble up to $4.80. Real housing services received in that period likely did not rise and fall with house prices. The end of the housing bubble drove the ratio back down to $3.70, a full dollar, but still 20 cents above the 25 year average from 1970 to 1995.

Each peak was followed by a recession, the last one the worst since the early 1980s. And now the ratio has once again reached $4.70. “History” suggests that the ratio will collapse again toward the $3.5 level. This can be accomplished by a massive increase in real GDP (unlikely) or a massive decline in the value of assets (more likely). The economy is not likely to fall into a recession in the next year or two, but growth will be historically modest.

What can impact the market value of assets? The return of “normal” interest rates, weaker profit growth, a serious global slowdown, each could trigger the “adjustment” in net worth. The adjustment might be accelerated because of widespread short covering and record high margin credit and other leverage. Logically this seems unavoidable, unless you believe that we are truly wealthier now, even with an economy that is delivering a rather poor performance (historically weak output and sales growth) in real terms. It would seem to not be “whether” we will adjust but ‘when’ and ‘how’ that will challenge the money managers and prognosticators. Every bubble is different, this one will be about stock prices as well as bond prices, missing in earlier bubbles which occurred during the steady decline in interest rates that started in the early 1980s. This time, rates will likely go up, not down.

 

Since writing this piece last year, central bankers have developed a new tool, NIRP. At 0% or negative rates, there is mathematically no limit to how high bond and equity prices can go. Real earnings can fall while asset prices rise as people put their money into any asset rather than hold cash. Asset prices will rise, yields will fall. Cash will be a “hot potato” that we can’t get rid of. Should the Fed become so disconnected from reality and common sense that it moves to “negative interest rates”, equity markets can rise, at least for a while. Ultimately, the value of “shares” in USA INC will depend on the economy’s real performance.

Continue Reading
Continue Reading