Economic Viewpoints: Inflation Came Down in May But Was Still High
Source: U.S. Chamber of Commerce
Author: Curtis Dubay, Chief Economist, US Chamber of Commerce
Retail sales rose 0.3% in May. In April, sales rose 0.4%.
June 16, 2023
Why it matters: Retail sales declined in February and March after a big jump in January. Two months of consecutive growth is encouraging.
But: Consumers’ ability to spend is still likely to decline as the year goes on. Inflation is only now slightly below wage gains and savings are spent down while credit card balances have risen sharply.
By the numbers:
- Sales were up at motor vehicles and parts dealers (1.4%), furniture stores (0.4%), electronics and appliance stores (0.2%), building material and garden supply stores (2.2%), food and beverage stores (0.3%), sporting goods and hobby stores (0.3%), general merchandise stores (0.4%), non-store retailers (mostly online sellers) (0.3%), and food and drinking places (0.4%).
- Sales were down at gas stations (2.6%) and miscellaneous stores (1%).
Looking ahead: A robust job market could put a floor beneath consumer spending and keep it stronger than in previous economic slowdowns.
Inflation Came Down in May But Was Still High
June 14, 2023
The Consumer Price Index, the broadest measure of consumer prices, rose 4% annually in May but was down from April, when it was 4.9% and well down from the peak of 9.1% in June 2022.
- On a monthly basis, inflation rose 0.1% from April to May. This is a drop from March to April when prices rose 0.4%.
Why it matters: Despite the progress, inflation remains well above the 2% target and the underlying data is more concerning.
- Core prices, which strip out volatile elements like food and energy, rose 5.3% on an annual basis and 0.4% from April to May.
- The Federal Reserve looks more closely at core prices than the overall inflation number.
Looking ahead: The Fed could still pause interest rate hikes at its meeting this week, but if core prices continue to remain high, it will have to resume rate increases, perhaps as soon as July.
Credit Card Debt Surges in April
June 9, 2023
Consumers are spending up their credit card balances at a sharp rate. In April, they rose 1.1%, and in March they rose 1.2%.
Why it matters: This could have significant repercussions for consumer spending and economic growth.
- The big picture: During Covid, consumers paid down their credit card balances by $127 billion.
- Consumers added $272 billion to their credit card balances since March 2021. Balances are now 13% larger than their pre-Covid peak.
However, income has grown in that period. As a share of income, credit card debt is still below its pre-Covid level and well below its average over the last 20 years.
Looking ahead: Consumers can’t add much more to their card balances, especially with tightening credit standards. Credit will be less able to bridge the gap between inflation and wages (inflation is still rising faster than wages). This could put downward pressure on consumer spending, which would also put downward pressure on economic growth.
339,000 Jobs Created in May
June 7, 2023
The labor market remains hot, making it more challenging for the Federal Reserve in its efforts to tame inflation.
- 339,000 jobs were created, while expectations were for 188,000.
Why it matters: The labor market is the most important data point the Fed looks at when gauging how its policies affect inflation.
Be smart: The labor force grew by 130,000. We are now almost 2.4 million workers above the pre-pandemic participation level.
- But, if we had the same participation rate now as in February 2020, there would be 1.95 million more workers in the labor force.
By the numbers:
- Wages rose 0.3% from April and 4.3% annually from May 2022.
- Education and Health added 97,000 jobs; Professional and Business Services 64,000; Government 56,000; Leisure and Hospitality 48,000; Construction 25,000.
- Industries that lost jobs in May were Information (9,000) and Manufacturing (2,000).
What's next: With another strong jobs report, the Fed is likely to raise rates again when it meets later this month.
What’s With the Resilient Housing Market?
May 26, 2023
Despite the enormous headwinds from sharply higher mortgage interest rates, the housing market is proving to be resilient after demand fell off steeply when interest rates initially rose.
Why it matters: Demand for homes still exceeds supply, and prices are likely to remain steady as long as this situation continues.
Details:
- Home builders’ optimism is up in recent months.
- Housing starts are rebounding. New permits are down the last two months, but that’s after a 10% jump in February.
- New Home sales were up 4% in the last two months. Existing home sales are down the last two months, but that was after a 14% gain in February. Pending sales were flat in April.
Be smart: Even with higher mortgage rates, there are still more buyers than sellers.
- Buyers are coming back into the market because prices have come down as interest rates have risen.
- Supply is constrained because existing homeowners are hesitant to put their homes on the market, giving up a low-rate mortgage for one with a higher rate.
Looking ahead: While prices will stay below pandemic highs, expect them to remain steady as long as demand outpaces supply.
Business Economists Forecast Modest Growth Through 2024
May 24, 2023
Business economists are lukewarm on the economy. The National Association of Business Economists (NABE) regularly releases a survey of prominent economists where it asks them about their outlooks for the economy. The responses from their most recent survey are interesting:
Economists in “the latest NABE Outlook Survey are divided as to whether a recession in the U.S. is likely in the next year. The median forecast calls for economic growth through 2024 to be modest. Interest rates are expected to decline and inflation is expected to slow in 2024, while job growth is anticipated to moderate, and the unemployment rate to rise.”
Why it matters: The NABE economic outlook is similar to ours at the Chamber. We see a slow economy in 2023 with a 65% chance of a recession this year.
Looking ahead:
- We do not think interest rates are likely to fall in 2024 unless a significant, unforeseen shock happens to the economy.
- On the debt limit, it’s impossible to know how long it would take for a breach of the debt limit to cause a global financial crisis, so it’s best not to test it.
Read more from the US Chamber:
- Economic Data: Comprehensive quantitative snapshots of business sectors and topics to help business and political leaders make informed decisions.
- Workforce Data: Capturing the current state of the U.S. workforce.
- Small Business Index: The MetLife & U.S. Chamber of Commerce Small Business Index is released on a quarterly basis and is compiled from 750 unique online interviews with small business owners and operators each quarter. The Index delivers a comprehensive quantitative snapshot of the small business sector as well as explores small business owners’ perspectives on the latest economic and business trends.
- Middle Market Business Index: The survey panel consists of approximately 1,500 middle market executives and is designed to accurately reflect conditions in the middle market.
About the authors
Curtis Dubay is Chief Economist, Economic Policy Division at the U.S. Chamber of Commerce. He heads the Chamber’s research on the U.S. and global economies.
New Member Highlight – Cardinal Estate Planning
We are pleased to highlight Genesis House who joined the Chamber in May of 2023.
Founded in 2022 by Nick Lutz of Berwick, Cardinal Estate Planning exclusively focuses on elder law, asset protection, estate planning and other closely related practice areas.
Over the course of Nick's career he has helped hundreds of families in northeast and central PA protect their assets from nursing home cost and guided families through their short and long-term planning goals.
Learn more about Cardinal Estate Planning.
Chamber Day at the Capitol Key Takeaway: Engage with Your Chamber
By Chris Berleth, President, Columbia Montour Chamber of Commerce
Last year, a small, mom-and-pop restaurant along Route 61 in Schuylkill County discovered that their lower, experience-based unemployment compensation tax rates were being assessed a gigantic rate increase. Turns out, that since they were forced into prolonged, pandemic-related shutdowns, their rate reverted to a default level. Yikes.
Thankfully, they were a member of their local chamber, who brought up the issue in a coalition call with the PA Chamber of Business & Industry and several other regional chambers. As it turns out, that Schuylkill County-based mom-and-pop shop wasn’t alone. More than 2,700 businesses in Pennsylvania who had rehired their staff post-pandemic were also assessed rate increases, and under the law, there was nothing that could be done to help them short of legislative action.
Chamber leaders are frequently asked, “what exactly does a chamber of commerce do?” While the precise answer varies by region, the best answer that applies to all Chambers remains: “we advocate for our members.”
In this instance, the Schuylkill Chamber of Commerce elevated the issue to the right people, and a coalition of more than 60 chambers, including the Columbia Montour Chamber, was born. Thanks to the PA Chamber of Business & Industry, who organized efforts in Harrisburg, the legislature passed S.B. 1083, which brought the relief these businesses needed.
You might be thinking, “Chris, this is old news, why retell it?” My answer is a call-to-action and a reminder: engage with The Columbia Montour Chamber, so that we can help you in the same way!
Yesterday (June 13), Taryn Crayton, Director of Member Engagement, and I had the opportunity to participate in “Chamber Day at the Capitol”, a partnership between the Pennsylvania Association of Chamber Professionals and the state Chamber. The event was packed with invaluable information, including insight into the state budget and its negotiations, policies that will make Pennsylvania more competitive and attractive to workers, and some policies that could negatively impact your organizations.
Speaker of the House Joanna McClinton (D-Philadelphia) shared about the importance of continuing to make the Commonwealth competitive through reduction of the corporate net income tax. House Appropriations Chair Jordan Harris (D – Philadelphia) and Senate Appropriations Chair Scott Martin (R-Lancaster) discussed how to better fund education, and their agreement to have the Motor Vehicles License Fund be entirely focused on repairing bridges and roads. PA Secretary of Community and Economic Development Rick Siger outlined a plan for improved efficiency in permitting.
The PA Chamber gave an overview of the influence on the courts, and reminded Chamber leaders of meaningful upcoming elections for offices like the State Supreme Court, Auditor, Treasurer, and more.
A panel of workforce experts, including our very own Hope Lineman
(Hope serves on the Board of the Foundation of the Columbia Montour Chamber of Commerce, and works as Advisor to the Chancellor for Workforce Innovation, PASSHE), shared how higher education institutions are working together to offer valuable resources to train a generation of new workers in an “ecosystem of skills-based education”.
We discussed permitting reform at the state and federal level, the now-open grant process for broadband expansion through the Pennsylvania Broadband Development Authority, and had an especially important conversation about the future of the PJM grid, PA’s energy exports, and renewable energy.
More than 80 Chamber leaders from across the Commonwealth met with state officials, including our own delegation. While the Senate was not in session, the event was attended by Representative Robert Leadbeter and newly-sworn-in Representative Michael Stender.
The event was packed with information, and on the 90-minute return drive, Taryn said this, “Before I joined the Chamber, I wasn’t quite sure what to expect. Now I get it. We’re into everything for our members. If they need it, we need to help them make connections. We engage at this level so that they get something by engaging with us.”
I couldn’t have said it better myself.
Friends, your membership gains you access to resources like these, and it means that whether you’re aware of it or not, we’re working to stay connected on your behalf. We need your help. We’d love to connect with you individually, and would love your input in Chamber committees, including Government Affairs, Ambassadors, New Ventures, and the Manufacturing Council.
For more information on how to get connected, contact us anytime at 570-784-2522, or email Taryn Crayton, at tcrayton@columbiamontourchamber.com.
Promote Summer Events in July ChamberPack!
Summer is upon us!
Don't miss the opportunity to keep the dog days of summer at bay by getting your event, program, workshop, promotion or regular business services in front of Chamber Members by being apart of the next Chamber Pack.
ChamberPack is a cost-effective way to get your information to the Chamber's 400+ members. Just provide copies, and we'll take care of compiling and sending the mailing. The next ChamberPack will be headed to mailboxes just after July 4th. Remember, your fliers need to be submitted for approval by June 26th and are due at the Chamber by June 30!
Call the Chamber at 570-784-2522 to reserve your space or click here for more information.
Member News – June 14, 2023
MC Federal Credit Union wins Award
MC Federal's “The Road to Financial Wellness” a six-week course with topic areas for each week has won the CrossState Credit Union Association’s Desjardins Adult Financial Education Award. This program will now advance to the national level of competition. Congratulations to them and good luck at the national level!
Nespoli Jewelers Celebrating Two Milestones
This summer Nespoli Jewelers of Berwick is celebrating 25 years of third-generation ownership and 77 years in business. Congratulations Jonathon Nespoli and to the Nespoli Family.
Celebration Villa to host VA Benefit Informational Session
This June 15th event is open to the public beginning at 2:00 pm. If you have questions about VA benefits that are available, join Bridget Kingston the local Columbia County VA rep at Celebration Villa Berwick. See session flyer here.
SBDC's Business Startup Basics Workshop June 15th
The SBDC's Business Startup Basics in-person workshop helps aspiring entrepreneurs take the First Step to successful business ownership. This free workshop will begin at 9:30 am. Register here.
Virtual Pennsylvania Careerlink Agricultural Roundtable Discussion
Join PA Careerlink for a vitural discussion about today's most pressing challenges for the Central PA Agricultural Industry. June 20th at 10:00. Click here to Register.
Concert Series at the Jackson Mansion
June 1 - August 31 with all concerts starting at 7:00 pm unless otherwise stated on the concert schedule. See full concert schedule.
Community Giving Foundation Announces new Funds
Two testamentary funds have been established by former Chamber Board member Mark Gardner with Community Giving Foundation. The first will be focused on support for non-profit organizations in Columbia and Montour counties and the second is a scholarship fund for students graduating from Danville Area School District. Learn more about these funds.
Penn College to launch paramedic certificate program in early 2024
The noncredit paramedic certificate program, requiring an EMT certification, will begin on January 2. Those who are interested in the program are invited to attend an information session on Thursday, June 29 at 7 p.m. Learn more about this program.
2nd Annual Recovery Picnic to be Held in June
Susquehanna United Way's United in Recovery program will be hosting its 2nd Annual Recovery Picnic on June 15, 11:00 am - 1:30 PM at 163 Briar Creek Lake Park Road, Berwick, PA, 18603. RSVP to the event here.
Bloomsburg Town Park Concert Series
Wednesday's June - August from 7:00 - 8:30 at the Town of Bloomsburg Bandshell which is located at the corner of Ft. McMlure Blvd. and Market St. Check out the town's Facebook for a full schedule.
McKonly & Asbury to hold State and Local Tax Webinar June 29th
This free, one-hour webinar will start at 2:00 p.m. EDT. One “Tax” CPE credit is available for this webinar. The level for this webinar is basic and there are no prerequisites for attending. This program is a live webinar that offers the opportunity to ask questions and interact with the presenters. Sign up here.
CSIU To Hold Free Trainings
Educators, First Responders, and Community Members register today for free trainings on Youth Mental Health First Aid and QPR Suicide Prevention. See a full list of dates and times here.
Press Enterprise to hold "Best of the Best" Contest
Berwick Historical Society to Host Grand Opening
June 24th will see the grand opening of the David A Sadock House in Berwick. Visit and tour the home of the Berwick Historical Society Library & Museum from 1:00 pm to 3:00 pm. Some of the areas and displays include the Prominent Citizens of Berwick, Berwick Business, Historic Homes, ACF Military Room, Fashions of Berwick, Berwick Schools, Genealogy, and Book Room.
IMC to host Webinar Series
The Innovative Manufacturers' Center will be hosting a free four-part webinar series about attracting and retaining employees. The series starts July 25th. See full details.
NEPIRC Manufacturing Day: October 13
Join NEPIRC on Friday, October 13th to celebrate the many contributions of our region’s manufacturing industry! At Manufacturing Day, you’ll be able to see product demonstrations; learn more about the cool products made right here in our local communities, and more!
State Chamber Releases 2023-2024 Budget and Session Priorities
June 12, 2023
Harrisburg - The PA Chamber of Business & Industry released an outline of their 2023 Budget and Session Priorities to capitalize on Pennsylvania's enormous potential and make it the most competitive state in the nation for business. What makes PA such a great place, according to the state Chamber? From its prime location to its rich history, strong infrastructure, industrial diversity, business resources, world-class economic institutions, and hardworking people, the Keystone State "has it all".
The PA Chamber's policy priorities include tax reform, permitting reform, and workforce development such as:
- Tax Reform
-Accelerate PA’s corporate net income tax phasedown.
-End Pennsylvania’s penalty on start-up businesses by removing or raising the cap on net operating losses.
-Improve the tax system for small businesses through accelerated sales tax, bonus depreciation, and net operating loss reform. - Permitting Reform
-Third party review of permits.
-Codify the Governor’s One Stop Shop.
-Streamline permit appeals.
-Stop draining agency resources.
-Shot clocks and deemed approved. - Workforce Development
-Bridge the job skills gap.
-Address childcare challenges.
-Expand the workforce pool.
-Cultivate the next generation of skilled workers.
On June 13, Chris Berleth, President of The Columbia Montour Chamber of Commerce, and Taryn Crayton, CMCC Director of Member Engagement, will meet in Harrisburg with Chamber and state officials to discuss policies impacting business in 2023-2024.
Member Highlight – Genesis House
We are pleased to highlight Genesis House who joined the Chamber in May of 2023.
Genesis House, Inc. was established in May 1985 and provides substance abuse counseling services to both male and female adults, and adolescents.
The main focus of their substance abuse program is on creating and developing acceptance and awareness of the addiction process, role fulfillment, expansion and use of support services, and cognitive behavioral change to support recovery. To learn more about their services click here.
Member News – June 7, 2023
Compassus Bloomsburg Celebrates Ribbon Cutting
Congratulations to Compassus, who last evening cut the ribbon on their Bloomsburg location! Compassus provides a full suite of post-acute care services in support of patients and their families.
Berwick Mayor Wins Mayor of the Year
Congratulations to Berwick Mayor Tim Burke on being named the Association of Mayors and Boroughs of PA 2023 Mayor of the Year!
Bloomsburg Children's Museum Receives $13,000 PPL Foundation Grant
Bloomsburg Children's Museum received $13,000 DEAI grant from the PPL Foundation. These funds will support the Museum's program called, "Including DEAI for future vitality and sustainability." The program will develop a pathway to career readiness for people with disabilities using Museum training resources.
June 8th Dale Carnegie Webinar
This free webinar will take place on Thursday, June 8, 2023, at 8:30 a.m. EST. This program is a live webinar that offers the opportunity to ask questions and interact with the presenters. Please note this webinar is limited to the first 100 participants. Register here.
SEDA-COG Employee Receives Designation
Betsy Kramer, SEDA-Council of Governments (SEDA-COG) Revitalization Coordinator, earned the designation of Certified Economic Developer (CEcD), a national recognition that denotes a mastery of skills in economic development, professional attainment, and a commitment to personal and professional growth. The CEcD Certification Program is the most prestigious designation in the economic development profession. Kramer was 1 of 32 economic development professionals nationwide who earned the designation. Congratulations Betsy!
CSIU To Hold Free Trainings
Educators, First Responders, and Community Members register today for free trainings on Youth Mental Health First Aid and QPR Suicide Prevention. See a full list of dates and times here.
Community Strategies Group Honored
Community Strategies Group was honored with the Kathy Possinger Achievement Award by the PA DCED during a conference held in Hershey. The award is in memory of Possinger, who served as a special advisor to the secretary of the state Department of Human Services before her death in 2021.
Brett Bauer of McKonly & Asbury Wins Award
McKonly & Asbury is pleased to announce that Principal Brett Bauer was recently awarded the 2023 Young Leader Award presented by the Pennsylvania Institute of CPAs (PICPA). Learn More.
Press Enterprise to hold "Best of the Best" Contest
2nd Annual Recovery Picnic to be Held in June
Susquehanna United Way's United in Recovery program will be hosting its 2nd Annual Recovery Picnic on June 15, 11:00 am - 1:30 PM at 163 Briar Creek Lake Park Road, Berwick, PA, 18603. RSVP to the event here.
Berwick Historical Society to Host Grand Opening
June 24th will see the grand opening of the David A Sadock House in Berwick. Visit and tour the home of the Berwick Historical Society Library & Museum from 1:00 pm to 3:00 pm. Some of the areas and displays include the Prominent Citizens of Berwick, Berwick Business, Historic Homes, ACF Military Room, Fashions of Berwick, Berwick Schools, Genealogy, and Book Room.
IMC to host Webinar Series
The Innovative Manufacturers' Center will be hosting a free four-part webinar series about attracting and retaining employees. The series starts July 25th. See full details.
NEPIRC Manufacturing Day: October 13
Join NEPIRC on Friday, October 13th to celebrate the many contributions of our region’s manufacturing industry! At Manufacturing Day, you’ll be able to see product demonstrations; learn more about the cool products made right here in our local communities, and more!
2023 Chamber Insurance Program Reports Dividend
Chambers of Commerce Service Corporation (CCSC) is pleased to announce that Penn National Insurance has declared a 3% dividend for the Chamber Choice Business Insurance program. Members who placed their insurance coverage with Penn National Insurance during the 2021/2022 program year and remained active chamber members and policyholders through the end of the program year, will receive a dividend check during the month of June. This year’s dividend totaled over $640,000.00. Over the past 11 years, Penn National Insurance has returned an average of 6% in dividends each year, and an aggregate total of $12.9 million to the business community.
The Chamber Choice Business Insurance program is just one of many benefits that CCSC offers its member Chambers. The partnership between Penn National Insurance and CCSC was designed to provide a value-added membership benefit that would help Chambers attract and retain members.
An important aspect of this group insurance program is preventing loss and controlling claims costs. Because dividends are based on the group’s collective loss experience, a business that may have had a significant loss may still be eligible to receive a dividend.
The program is sold exclusively through local, independent agents who can offer chamber members a variety of coverages and pricing on property and casualty insurance, including business owners, commercial auto, property, general liability, inland marine, and workers’ compensation. Dividends are paid on all of these coverages. In addition, through safety consulting, Penn National Insurance and local independent insurance agencies encourage member businesses to develop safety practices to substantially reduce or eliminate workplace injuries.
The Columbia Montour Chamber of Commerce is proud to offer this program to its members, through its members. To learn more about this chamber program, contact Taryn Crayton, Director of Member Engagement at tcrayton@columbiamontourchamber.com.
Environmental Sustainability in Manufacturing
Source: Mckonly & Asbury
Over the past year, we have covered many manufacturing trends such as Industry 4.0, the economy, fraud, the skilled-labor shortage, creative labor solutions, and more. However, one topic which up until this point has not been emphasized is environmental sustainability in manufacturing. According to a recent Forbes article, sustainability is one of the top five manufacturing trends in 2023:
“With consumers increasingly showing that they care about sustainability and ethical production and are willing to base their buying decisions on it, 2023 is set to be the year where it becomes a business priority for companies as well as a matter of morals and principles.”
While the degree to which your customers are willing to base their buying decisions on your sustainability efforts varies greatly from industry to industry, the fact that environmental issues have risen to the top 5 trends warrants the attention of all manufacturers. Beyond the moral reasons to consider embracing environmental sustainability, there are several ways in which it could benefit an organization financially and operationally.
Reduce Expenses
Electricity bills in Pennsylvania have increase by an average of 73% between December 2020 and December 2022. This has led many manufacturers to begin calculating ROI on projects that are designed to reduce energy costs, such as investing in solar (taking advantage of the 30% solar tax credit), replacing old machines with energy efficient ones on the plant floor, or increasing the use of sensors and IoT technology.
Beyond the cost savings from using less electricity, companies are constantly looking to further reduce the amount of scrap from the manufacturing process. Whether it’s achieved by repurposing scrap or selling it, reducing the amount of scrap that goes into landfills helps both the environment and the bottom line.
Increase Revenue
Later this year, the Securities and Exchange Commission (SEC) is expected to finalize their new disclosure rules standardizing the climate-related impact that public companies are required to disclose. The SEC’s plans initially included a requirement for public companies to disclose information about greenhouse gas emissions from upstream and downstream activities in its value chain. If investors begin to weigh investment decisions based in part on the new climate-related disclosures, then it is reasonable to expect public companies to take a closer look at the sustainability practices of their suppliers.
While purely speculation at this point in time, it is not far-fetched to imagine a day in the not-too-distant future when government contractors will have to disclose similar climate-related information as public companies are doing now. So, whether you supply parts to a public company or provide any government contracting work, there is a chance your environmental impact could contribute to either losing revenue or gaining new business depending on your company’s willingness to embrace environmental sustainability.
Create Market Buzz
A growing number of people are concerned about the environmental impact of the products they’re connected to. This is especially true for younger generations entering the workforce. At a time when attracting and retaining labor is an enormous challenge for manufacturers, many are using their environmental accolades to create market buzz in hopes of getting more applicants. Anecdotally, I have seen this on countless websites and even during plant tours, where manufacturers proudly display certifications, awards, and infographics to show current employees, applicants, and visitors that they not only prioritize environmental sustainability but stand out from their competition with respect to innovative solutions to climate-related issues.
There are many reasons to consider increasing your emphasis on environmental sustainability. Whether you intend to broadcast your environmental initiatives or you’re simply trying to keep up with possible future reporting requirements, ultimately to get started you’ll first need to figure out which environmental metrics are most important for your company to begin tracking.
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For more information regarding McKonly & Asbury's manufacturing experience, be sure to visit our Manufacturing Services page and don’t hesitate to reach out to a member of our manufacturing team.