Consumer Confidence, Job Openings, New Jobs, Republic First Bank, Out of Office and who was Elsa Noemi Perez? Oh, and Mother's Day.
So, What’s Next?
In the last two weeks:
The PCE inflation index went up. Not what folks wanted to see.
GDP went down, kind of what is expected when the goal is to slow down the economy.
Retail sales showed a strong kick; online sales had a 2.7% gain, and in-store sales also showed gains.
Last week, I talked about expectations and how it looks when expectations aren’t met. Let’s look at this week:
On Tuesday, consumer confidence for April came in way lower than expected, at 97.5 vs 103.5 expected and 103.1 in March. It’s the lowest level since July 2022.
Just so we are all on the same page, a score below 100 indicates a pessimistic trend.
Then, job openings dropped from 8.8 million to 8.5 million. 8.7 was expected.
Jobless claims came in about even as last month but better than expected.
New jobs came in at 175,000 vs. 240,000 expected, down from 315,000 created in March.
Missed it by that much, 99…
And then the index of supply management (ISM) services index fell below 50% for the first time since 2022. It was 49.4%. 52% is the number they were looking for. BTW, a number below 50% indicates an economic contraction.
So two weeks ago, inflation was higher than expected, leading most folks to think that interest rates will not be falling soon. Then this week, confidence and jobs soften, and unemployment increases ever so slightly to 3.9%.
While this may increase the chances for a rate cut this year, I don’t think it’s going to happen.
If it does, it will only be one cut, and it’ll be November.
For budget purposes, I would plan on zero interest rate cuts.
And on a related note…
28% of businesses reported raising prices over the past three months.
That’s not as bad as March 2022, when 66% reported raising prices.
Coincidence?
I think not.
In what can only be described as a bizarre conversion of universes, Republic First Bank has failed.
What are the odds that First Republic Bank failed last year and then Republic First Bank failed this year?
So, why did it fail?
Concentrations in its business.
Over half of its loans were in commercial real estate, and most were in New York.
As a business owner, what are your concentrations? Are your revenues spread out over a large customer base or concentrated with Costco or Wal-Mart? It’s worth looking at any revenue stream that contributes more than 20% to your sales.
Out of Office
Last week alone, I received 17 out-of-office emails when I hit ‘send’ on last week's Russell Report. I normally get about 9.
The weather must be getting better.
If you are looking to contact key decision-makers, your odds may be slightly lower, but here is the bonus, courtesy of Paul Castain of YourSalesPlaybook.com
When that email bounces back, note any contacts referenced as alternate contacts and if the out-of-office is business or pleasure.
You now have a new contact in the company that may be able or willing to give you more information than you already have.
You also have a conversation starter for your next meeting.
Who was Elsa Noemi Perez?
She was born May 25, 1924, in Lima, Peru. As a girl, she lost both her parents in a car accident, and she and her sisters were raised by her aunt.
At the age of 18, she secured a job with an American firm in Lima.
She used that job to secure a letter of recommendation from the Lima manager to their San Francisco office and had a family friend be her sponsor in the United States.
She got on a plane and arrived in San Francisco, and got a job at Bank of America in their international department.
She was a heck of a typist and learned English on the job.
She met a younger man at the bank with a high school degree and a strong work ethic, and they got married in 1954. They adopted a baby in 1962, she quit her job, and in 1968, they went overseas with the Asia Division of BofA, traveling the world and not coming back to California until 1984.
She hosted dignitaries and a ladies tea that included the wife of BofA’s CEO in 1978. Her social graces were second to none.
She certainly had chutzpah, the stories are endless, and she was so proud to be an American.
She died in 2014, eight years before my dad, Bill Russell, passed in 2022.
And she was my mother.
Mother’s Day is Sunday, May 12. Whether your mom is with you in body or in spirit, use that day to honor her, regardless of how long she was in your life. I promise you, she had an impact. Additionally, use this Friday to host a Mother’s Day desert or lunch at your company and recognize the women at your company who also work at home, doing their best to raise their children. I would suggest a “Bring your mom to work day”, but you might find your company restructured by the end of the day, so perhaps not.
Have a wonderful Mother’s Day!
