NFIB Confidence, Consumer Credit, Jobs, Lalo, WFH, Sapphire, IE Warehouses, ERC Fraud, and 70 years old!
The Economy
The hot days of summer are kicking in, and even the economic numbers seem to be too lazy to do anything.
The NFIB optimism index – National Federation of Independent Businesses – barely budged.
It came in at 98.6, forecasted at 98.7, and last month was 98.8.
The 51-year average is 98.
As I mentioned the last time the NFIB report came out, business owners are still looking for qualified candidates, with 58% looking to hire in June, but 86% of them reported few or no qualified candidates.
33% reported increasing compensation, up seven percentage points from the previous month.
32% plan to raise prices. Ouch.
Consumer credit rose by $5,100,000,000. That seems like a lot, but estimates had that at $10,000,000,000. The previous month, it rose by $17,900,000,000.
Consumers seem to be staying off the credit card for now, as those balances actually dropped. It was the vehicle and student loans that brought the numbers up.
Speaking of car loans, I’m guessing that there will be quite a few electric vehicles purchased between now and the end of September when the tax credits run out, so if you are a contractor that does residential electrical work, you’ll be busy.
Initial jobless claims came in at 227,000 for the week, below expectations of 235,000 and last week's 232,000. Nothing there for the Fed to hang its hat on to reduce rates.
Remember, they are watching to make sure that unemployment doesn’t rise too much. However, for them to lower rates, unemployment must increase or inflation must decrease, or a combination of both.
Bits & Pieces
BOOMER ALERT! Lalo Schifrin died at the age of 93 late last month. For those of you who remember Peter Graves, Barbara Bain, Greg Morris, Martin Landau, and Peter Lupus, you will recall the excitement of hearing the theme song he created for Mission: Impossible in 1966, and then hearing it again when Tom Cruise took the franchise to the next level.
He was an Argentinian, classically trained composer and musician.
WFH – Work From Home – got another lifeline for California.
Some may recall in one of my previous Reports that the governor of California had mandated all state employees be in the office four days a week starting July 1, stating, “in-person work makes us all stronger.”
Evidently not as strong as the Service Employees International Union thinks.
That order has been stayed for another year, so now state employees only must show up two days each week.
Headline: Premium Credit Cards Are Getting Even Pricier. Hmm?
As it turns out, the annual fee on your Chase Sapphire Reserve Credit Card is going up.
It was $550.
It’s going to $795.
I can tell you what’s NOT in your wallet: $795.
Evidently, the status associated with it is worth it.
I remember when a Gold Card was a thing.
Not to be outdone, the American Express Platinum card’s $695 fee will be going even higher than Chase’s later this year. They didn’t release what that number is going to be.
If you travel a number of times during the year, you do get perks, but reservations have to be made at Chase’s travel site, and there are a few provisos and a couple of quid pro quos.
I just can’t swallow seeing a $795 charge, or a $550 charge for that matter, show up on my statement. Or even $50. But that’s me.
Fulfillment and Warehouses
Many businesses continue to struggle with the uncertainty surrounding tariffs. Fulfillment companies are an excellent example.
In 2023, a 100,000 sf warehouse with a 36-foot ceiling would lease for $1.50 to $1.70/foot, triple net.
Triple net means that the tenant pays for property taxes, insurance, and maintenance.
That same space would likely go for $1.20 to $1.30/foot now. Ouch.
That’ll impact property values.
Covid Tax Credits – Five Years Later
Headline “4 Charged in Alleged COVID-19 Tax Scheme Totaling $93M, Officials Say”
Two of the four attempted a hostile takeover. They shot the leader “multiple times” when he started getting inquiries from the IRS.
I say ‘attempted’ because the leader survived the shooting, although he ended up paralyzed.
Why would he be getting inquiries, you ask?
Well, when you submit claims to the IRS (I assume for employee retention credit, or ERC) for 148 companies totaling $93,000,000, you might get a notice.
They recruited friends, FWB, friends of friends, and took anywhere from 20% to 40% of the funds.
That means the other folks got 60%. I’m guessing the Feds don’t like that either.
There is no doubt in my mind that the feds will pursue folks like these because as I have said many times before, you don’t take the government’s money. They don’t like that.
And it’s nice to know that some of the fraudsters are getting caught.
Finally… Guess what turns 70 on July 17?
Many of you actually know the answer to this one. Disneyland. The one in California.
Some trivia for you:
From the day the first shovel hit the ground to the day it opened, it took just less than a year to build the 17 attractions.
I’m guessing OSHA wasn’t a thing, but building inspectors were, and they had to figure out how to inspect an amusement park with 17 attractions since they had never done one before.
71 sites were looked at, and the final site was 160 acres in Anaheim. The cost was $4,600 per acre.
Bank of America facilitated the bank debt, which is why they had a branch in Disneyland on Main Street from opening day until July 28, 1993.
Admission was $1/adult and 50 cents/child.
Admission was roughly an hour’s pay in 1955.
Ride tickets were separate, ranging from 10 cents to 50 cents.
When I was a kid, they were labeled A, B, C, D and E. ‘A’ was ‘It’s a Small World’. ‘E’ was The Matterhorn. Hence the phrase, ‘E-ticket Ride’.
Today, it would cost $180 for admission, but if you can wait until August 19, it’s $104.
Well, I’m guessing California will get to a $100/hour minimum wage soon enough.
Less than two months after it opened, they logged the 1,000,000th visitor, way ahead of projections.
It is estimated that they have had 791,000,000 visitors through 2023.
They have about 17,000,000 a year, or 46,575 each day.
That’s a decent baseball stadium every day.
Many people thought Walt Disney was nuts. That’s a side effect of being a true entrepreneur.
So if someone says that your idea is nutty, that might be a compliment.
Have a productive week!
