Treasury
A survey released on September 10 by the National Federation of Independent Business (NFIB) shows that small business owners' pessimism about the economic outlook has intensified, with the uncertainty index reaching its highest level since October 2020, and inflation remaining the top issue facing businesses for several consecutive months. Meanwhile, Federal Reserve officials hinted at possibly starting rate cuts at the September 17-18 meeting, but Fitch Ratings expects this easing cycle to be more cautious and slower than previous ones.
A survey released Monday by The Conference Board shows that U.S. companies plan to increase salary budgets by an average of 3.9% in 2025, near historic highs. A shrinking labor supply is prompting companies to raise pay to retain staff, while slowing inflation is boosting real wage growth.
The latest Tax Foundation survey reveals that tax compliance costs for large corporations rose by 32% from 2017 to 2023, with multinational companies averaging compliance expenditures of $25.6 million. The survey also found that the U.S. tax code has expanded in size, with taxpayers spending over 7.9 billion hours annually on compliance, costing $413 billion.
U.S. manufacturing continued its contraction trend in August, with the ISM manufacturing index rising to 47.2% but still below the 50 threshold, marking five consecutive months of decline. S&P Global's PMI indicated that output fell for the first time in six months, with companies reducing workforce and purchases due to weak demand and high inventories. The Federal Reserve Bank of Atlanta subsequently lowered its third-quarter GDP growth forecast to 2%.
Data from The Conference Board shows that the consumer confidence index rose to 103.3 in August, the highest in six months, but the job market outlook weakened, with 17.5% of respondents expecting fewer jobs. Fed Chair Powell hinted at a possible rate cut in September, and consumer expectations for rate cuts rose to their highest since April 2020.
The American Fintech Council (AFC) is joining forces with multiple earned wage access (EWA) service providers to oppose the Consumer Financial Protection Bureau's (CFPB) proposed rule that would treat some early wage payments as loans, and is considering filing a lawsuit.
Fed Chair Powell clearly stated at the Jackson Hole symposium on August 23 that the time has come for policy adjustment, hinting at a rate cut at the September 17-18 meeting. He noted that inflation is close to the 2% target and that further cooling of the labor market is not what the Fed desires. The market is divided on the probability of a 25-basis-point or 50-basis-point cut, with multiple Fed officials expressing support for easing.
Data from the U.S. Department of Labor showed that initial jobless claims for the week ending August 17 rose to 232,000, indicating continued softening in the labor market. Philadelphia Fed President Harker said rate cuts should begin in September, and Fed meeting minutes showed most officials support easing in September.