Economics For Small & Medium-Sized Businesses

Ford will lay off more than 4,000 people in their European operations.  The auto business is a killing field right now and Ford is not immune.  China is making and then dumping low cost electronic vehicles onto the market.  In the past few months Stellantis, Nissan, Volkswagen, and now Ford have announced cost cuts.  More in Economic News...

 

The decision to attempt to force people to buy electric vehicles they do not want has blown up in our faces.  The solution is simple.  Let the market decide.  Remember the spiral light bulbs we had to move to?  Twenty years later they don't exist.  LED bulbs rule the market.  Let all options compete and the market will determine the winner.

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A ton of economic uncertainty evaporated with the elections finally behind us.  That was a long slog.  Hiring slowed to almost nothing for a period of two or three months.  Time to get this economic house in order and get our deficit under control.

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October job creation was awful.  Total jobs created in October were 12,000...in a nation of nearly 335 million people.  Perhaps more importantly, the prior months were revised (corrected) much lower as well.  To the pundits telling us about the amazing US economy, I say nonsense (see below).  The data is awful and we are slipping.  Don't tell me otherwise, I am with multiple businesses every week.  I have my nose in it.  I am not sitting in a government office counting my days until retirement.

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Thus ends my rant.  Here is more...

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​Today the US Bureau of Labor Statistics reported strong job growth.  A total of 254,000 jobs were created in September.  Blowing away expectations.  Have you heard there is an election a month from now?  Turns out the people that reported massive errors a few weeks back (see below) are telling us of a Biden Harris boom right before the election.

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I am shocked. 

 

We are a nation running on fumes, run by fools from both parties.  Did I mention in this boom we have a deficit approaching $2 trillion per year?

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The Federal Reserve reduced interest rates by 50 basis points (.50% to most Americans).  The prime rate is now 8.00% down from 8.50% prior. 

 

Job creation numbers were dramatically overstated for the twelve month period running April 2023 through March 2024.  This might lead one to be cynical regarding the role politics plays in government reporting.  More details...

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Debt. Debt. Debt.  We are buried in debt at all levels.  Take a look at the Economic News Section.  Truly scary for our future.

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Second quarter GDP came in well above expectations at 2.8%.  All in all good news.  A few concerns in the report.  Personal savings rates are falling.  We have record credit card debt.  Inventories are building.  I will bet we move to lower growth.

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A link to a great piece on the Crowdstrike/Microsoft meltdown is in Economic News.  These failures can have profound effects on the growth rate of the economy.  This issue is the last thing a slowing economy needed.  

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Projections for the 2024 Federal deficit were updated.  Bad?  How about horrific.  The economy and inflation is being driven by borrowed money chasing goods and services.  We are our own worst enemy.  A day of reckoning is ahead.  See more in Economic News.

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A section on the importance of cost of capital has been added.  Understanding cost of capital and the relation to return on assets is critical to the success of your business.

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Inflation is in the news and a piece of analysis on the impact of inflation on your profit and loss has been added as well.