The Beige Book, Insurance, Conversation Starters and Employee Recognition
What is the Beige Book?
Historically, it is a standard government publication, bound by the government printing office with a cover that was… wait for it… beige (now that I’ve written it, this section is pretty beige, so if you want to skip to the next section, I’m not offended).
Its cover name is Summary of Commentary on Current Economic Conditions.
Yes, it’s all pretty beige.
Back to the subject… It is released two weeks before the Federal Open Market Committee meeting, also known as “The Fed Meeting”. Since it was released this past Wednesday, it must mean the FOMC meeting is on April 30 and May 1.
When, once again, they will not lower rates.
The Federal Reserve has 12 regions in the U.S., each with its own Federal Reserve Bank. For example, the Federal Reserve Bank of San Francisco handles the West Coast, and the Federal Reserve Bank of Atlanta handles the South. Each region submits its economic essay on the region it represents, and at the FOMC, those essays and multiple economic data points are considered to assist the Fed in monetary policy.
10 of the 12 banks reported that their regional economies grew. The other two had no change.
High prices are making consumers more selective.
Businesses were cautiously optimistic about the next 12 months.
Price increases were modest, but the biggest impact on inflation was the rising cost of home and business insurance.
They also stated that consumers were getting price-sensitive. I’m not sure you need an economist to tell you that, but such is life in the ivory towers.
However, the odds of a recession have been reduced to 29%, according to a survey of leading economists. The odds were 63% in Q3 of 2022.
Honestly, I’m not sure how many folks care about an upcoming recession. They’d just like to see prices stabilize and actually get insurance that doesn’t cancel or increase every year.
Speaking of insurance…
One of my readers had her home insurance cancelled due to a perceived fire risk in the southern Mojave Desert. There is not a lot to burn there, but that’s not the point.
She paid $1,049 in April 2023. In December she was informed they would not be renewing.
The California State Plan (FAIR) quoted her $6500 plus a $1600 supplemental fee – total $7,700/year. The state of California to the rescue!
A long story short, AAA insurance brokerage placed them for $2,667/year.
It took her some real digging, but she was able to find something somewhat affordable.
Conversation Starters – In case the Beige Book isn’t that exciting to you
This week we will hear about Q1 GDP. Expectations are 2.2%, down from 3.4% in Q4. A good opening line with customers this week would be to ask how their Q1 numbers were.
Also coming up is the PCE on Friday. Personal Consumption Index. Ask your customers how much their costs are increasing.
BTW, the PCE makes the most impact with the Fed. If it comes in higher than expected, no rate cuts this year.
Mortgage rates went above 7% this past week and existing home sales fell 4.3% for March.
…and the best conversation starter:
$68,000,000 in coins are lost every year. That’s not a typo.
Seven years ago, Reworld, a sustainable waste company, started an effort to separate coins from the trash that comes into their facility.
Since then, they have collected $10,000,000 worth of coins, of which $6,000,000 were usable.
Some coins don’t survive being incinerated or crushed very well.
But most do.
Particularly Buffalo Nickels. They have jars and jars of them.
No wooden nickels, I’m afraid.
And finally…
Every Thursday, my business breakfast club starts our meeting with a question of the day. This week’s question was: Aside from your work or family, what is the one thing you are most proud of? As it turned out, most of the proud and memorable moments were based on peer or teacher recognition. The line drive catch in Little League, winning the CIF Football Division championship, being recognized by a leading expert in a particular field, getting the best grade in the class, or just proving to classmates who didn’t want you in your group that you could do it better without them. And then acing it.
This brought me to think about employee recognition. Some folks pooh-pooh employee recognition events or awards, but it was this conversation last Thursday that emphasized to me the importance of recognizing achievements. Those were the things we remembered and could look back on.
Build that into your plan this year using a metric that is not only important to you but also important to your employees. That’s a win-win for everyone.
