NAM: Monday Economic Report

• U.S. consumer credit outstanding rose 2.8% in September, slowing from the 6.7% and 5.2% gains in July and August, respectively. Revolving credit (including credit cards and other credit lines) fell for the second consecutive month. This could suggest some hesitance on Americans’ willingness to incur more credit card debt.
• Over the past 12 months, consumer credit outstanding has increased 3.0%, with revolving and nonrevolving credit up 1.9% and 3.4% year-over-year, respectively. The year-over-year pace of revolving credit activity registered the lowest reading in one year, down from 2.3% in the prior release.
• The Index of Consumer Sentiment edged higher for the third straight month, up from 95.5 in October to 95.7 in November on a positive outlook for the coming months, according to preliminary data from the University of Michigan and Thomson Reuters. This was offset somewhat by a weaker assessment of the current economy, with respondents citing political and trade uncertainties, but consumers have been encouraged by strong job and wage gains.
• New orders for manufactured goods have fallen 3.5% since September 2018, declining 0.9% with transportation equipment excluded. Core capital goods orders—a proxy for capital spending in the U.S. economy—declined 0.6% in September, with a decrease of 1.0% year-over-year. The data continue to highlight weaknesses in the manufacturing sector, with global softness and trade uncertainties weighing on activity.
• The U.S. trade deficit decreased to $52.45 billion in September, the lowest level since April, with goods imports falling by more than goods exports. In non-seasonally adjusted data, U.S.-manufactured goods exports have fallen 2.86% through the first three quarters of the year relative to the same period last year, with international demand pulling back after stronger data in 2017 and 2018.
• As a sign of how energy dynamics have shifted dramatically in recent years, real imports in 2012 dollars of petroleum were the lowest since the series began in 1994, and the real petroleum trade deficit was also an all-time low at $4.39 billion in September.
• There were 469,000 job openings in the manufacturing sector in September. Despite some easing recently, manufacturing job postings have remained elevated, averaging 485,000 year to date, including the all-time high reached in June (515,000). There continued to be more job openings (7,024,000) than the number of people looking for work (5,769,000)—a feat that has occurred now for 16 straight months.
• Manufacturing labor productivity inched down 0.1% at the annual rate in the third quarter, extending the 2.4% decline in the second quarter. With that said, output in the sector rose 1.1% in the third quarter, ending two straight quarters of declines, with a similar trend for the number of hours worked, which increased 1.3%. Unit labor costs for manufacturers rose 3.6%.

Janette Lohman named ‘Influential Woman in Tax Law’ by Law360

Thompson Coburn partner and AIM Tax Committee member Janette Lohman has been named among Law360 Tax Authority’s first-ever “Influential Women in Tax Law” list, for accomplishments including being the second-youngest and first female Director of the Missouri Department of Revenue and later successfully battling the agency over a consolidated return requirement. The list profiles 14 women in tax law, “spotlighting attorneys who have provided outstanding service to their clients and the public, changing the dynamics at their workplaces while they did so.”

Janette told Law360 that her key to success is “just outworking everyone” — while maintaining a positive attitude. “I just worked really hard,” she said. “And for heaven’s sake, I have had a really exciting life.”

After working together for nearly a decade, Thompson Coburn partner Matt Landwehr described Janette as “the Mount Rushmore of state and local tax (SALT) lawyers in the U.S.” due to her vast network of colleagues and knowledge of SALT issues. Matt said Janette has earned that network by ensuring everyone is treated equally and with respect. “I think that’s part of why she’s been so successful, [because] it’s not like she’s doing it for some sort of gain; it’s who she is.” Matt said. “She can relate to anybody on any level … and that sets her apart from other people who may not have that ability to make that person they’re interacting with feel like they’re the most important person in the world.”

Ray McCarty, president and CEO of Associated Industries of Missouri said, “I served as a legislative liaison when Janette was Director of Revenue and we have worked together in the private sector since we both left the DOR. All of us in the tax community are happy for Janette receiving this well-deserved recognition. She works tirelessly on behalf of her clients and works for the greater good through associations such as AIM,” he said.

Janette shared with Law360 a business development strategy from very early in her career that she has continued to this day. After moving from the Department of Revenue into private practice, Janette realized she had to start from scratch to build a client base. During her first year of practice, she identified six people who helped her, and sent them chocolate during the Thanksgiving holiday, but it has evolved into the now famous holiday turkey cookies. According to Law360, “The next year, the list grew to 20, followed by 40, 100, and now the list is over 1,400 people, but each box of cookies still comes with a handwritten note.” Never one to procrastinate, Janette begins writing the notes as early as September.

“As my practice grew, there were a lot of people who helped me along the way, and I remembered all of them and what every one of them did,” she said.

Janette has over 30 years’ experience practicing in all areas of state and local taxation, including representing clients before state and local taxing authorities in corporate and personal income, sales/use, ad valorem and municipal tax and license fee controversies. She currently serves as the President of the Institute for Professionals in Taxation and as the IPT’s liaison to the American Bar Association Executive Committee’s Taxation Section.

NAM: Monday Economic Report

• The U.S. economy grew 1.9% at the annual rate in the third quarter. The consumer continued to help prop up economic growth, with personal consumption expenditures up a modest 2.9% at the annual rate for the quarter. Residential fixed investment rose a solid 5.1% in the third quarter, the first positive reading for the housing market since the fourth quarter of 2017.
• Business spending served as a drag on economic growth for the second consecutive quarter, with businesses pulling back on investments in equipment and structures in light of global headwinds and ongoing trade uncertainties. Nonresidential fixed investment declined 1.0% and 3.0% in each of the past two reports, respectively.
• For the year, I continue to estimate 2.3% growth for 2019, slowing to 1.8% growth in 2020. There are obviously strong cases to be made for both upside and downside risks in that outlook, at least for now.
• The Institute for Supply Management® reported that manufacturing activity contracted for the third straight month, stabilizing somewhat on slower declines in new orders and employment. Exports rebounded in October, but production declined to the worst reading since April 2009.
• In addition, manufacturing employment fell by 36,000 workers in October, extending the loss of 5,000 workers in September and the largest monthly decline in the sector in 10 years. Yet, the decrease stemmed largely from the effects of the GM strike, which has now been settled. Motor vehicles and parts employment plummeted by 41,600 in October, and a rebound in the November data would be expected.
• In the larger economy, nonfarm payrolls increased by 128,000 in October, beating the consensus expectation of around 85,000. The unemployment rate inched up from 3.5%, the lowest since December 1969, to 3.6%. Still, the labor market remains quite tight, and manufacturers and other businesses continue to cite an inability to find talent as a top concern.
• Personal income and spending rose 0.3% and 0.2% in September, respectively. Personal consumption expenditures have been one of the stronger elements in the economy (see above), rising 3.9% year-over-year. Meanwhile, manufacturing wages and salaries were $920.7 billion in September, up by a healthy 3.8% since September 2018.
• As expected, the Federal Open Market Committee voted to reduce short-term interest rates by 25 basis points after its Oct. 29–30 meeting—its third cut in rates this year. The Federal Reserve is committed to taking steps to help prolong the economic recovery. With that said, future moves are contingent on incoming data, and the expectation is that the FOMC will hit the pause button for now. Indeed, I do not anticipate another cut in the target federal funds rate in 2020 at this point, unless economic conditions weaken further

Last Call to Jump Start Your Workforce Hustle Game

How is your workforce recruitment and retention hustle game?

With 10,000 baby boomers retiring each day, your job as an HR professional is not easy when trying to overcome these massive departures. So, what can you do to increase your workforce hustle performance and compete for talent….? Turn to technology or automation to replace jobs/tasks? Fill vacant positions through internal promotions? Create a mentorship program? Let employees bring pets to work? (There’s no bark about it—there are companies that do this and see retention rates increase. But is it even practical for a manufacturing job?) 

Let Missouri Enterprise’s experts help you cut through all the noise as they provide insight into real ways to improve your workforce hustle game through this new WORKFORCE-CENTERED WORKSHOP lineup. Sign up your HR team, your training team, your new supervisors, heck– sign up yourself! We promise you will take away something that will give you a new edge because this schedule features some of the hottest topics to help manufacturers, like YOU, overcome workforce challenges:

Special Full-Day Training

This suite is perfect for HR professionals. 

You or your team members can attend both the Millennial Assessment and the A.R.T. of Interviewing sessions below to make up a full-day workshop for $295 p/person or choose one session for $195 p/person (morning or afternoon). Lunch and materials are included, and each participant will receive a Certificate of Completion at the conclusion. Choose ONE  or BOTH sessions:

• Millennial Assessment: How Millennial-Friendly is Your Company Culture? In advance of the workshop, we will send you our NEW millennial company culture assessment to complete and submit. Our expert will then develop customized strategies and tips to share based on the results as well as go through the eight recommendations necessary to improve recruitment and retention of the millennial workforce. Certificate of Completion provided.2019 Dates/Locations: Kansas City – Nov. 13, 8 a.m. – noon, Fulton -Nov. 21, 8 a.m. – noon, Lebanon – Nov. 22, 8 a.m. – noon
• A.R.T. of Interviewing: Coaching Employee Performance and Expectations at Meeting #1 (A DDI course)
  This session focuses learners on the responsibility of the interviewer to provide the job candidate with a quality experience and explores the consequences of interviewer behaviors. It raises learners’ awareness of the important role that they play and equips them with skills to run an effective interview that yields meaningful behavioral data. Certificate of Completion provided.
  2019 Dates/Locations: Kansas City – Nov. 13, 12:30 p.m. – 4:30 p.m., Fulton – Nov. 21, 12:30 p.m. – 4:30 p.m., Lebanon – Nov. 22, 12:30 p.m. – 4:30 p.m.

Recruiting & Retaining Millennials: Who are they & what drives their employment decisions? – WEBINAR
Did you miss out on our Recruiting & Retaining Millennial Workshops from our previous schedule? No worries! We are taking away the highlights from our sessions held throughout the state with manufacturers and millennial workers, including the major questions asked by employers and the answers from  millennials about what drives their employment decisions —  and wrapping it up into a webinar for you to learn from the comforts of your office. Join us for an online presentation followed by a live question and answer with Bob.
Date/Location: Nov. 15, 2019, 1 -2 p.m. A link to the webinar will be emailed after registration

Industry 4.0/5.0 – Cobots, Robots & More – WEBINAR
What is driving these tech advancements (think workforce shortage!), how does US manufacturing compare to global competitors in utilizing technology, and how realistic is it for a small to med. size manufacturer to implement these tools? Join us for an online presentation followed by a live question and answer with the experts.   Have your engineering team join you!
Date/Location: Nov. 22, 2019, 1 – 2 p.m. A link to the webinar will be emailed after registration

Cultivating Effective Leaders – WEBINAR
Often individuals are promoted into supervisory or management roles as a result of turnover or retirement and NOT because they have superior leadership experience or skills. In this webinar, we will talk about how lean principles can help guide managers and supervisors to become more effective leaders and supportive problem-solvers. Join us for an online presentation followed by a live question and answer with the experts. 
Date/Location: April 3, 2020, 1 – 2 p.m. A link to the webinar will be emailed after registration

Workplace Wellness: Instituting a Culture That Values Employees – WEBINAR
Often times, when we think of an organization’s health, financial outlook statements and viability often come to mind. It’s less likely we consider how the organization supports employee health. Creating a culture of wellness means fostering a workplace that encourages and promotes the well-being of your employees. It means implementing ways for employees to be healthier at the workplace and helping them create healthy habits in both their personal and professional lives, which improves their productivity. In fact, a  2015 study cited by Forbes claims that happier employees were more productive in the workplace than their less-happy counterparts. In this webinar, organizational training and development expert, April Schmidt, will discuss various ways companies like you can create a culture of wellness. Certificate of Completion provided. This would be an excellent  session for your CEO as well!
Date/Location: April 17, 2020, 1 – 2 p.m. A link to the webinar will be emailed after registration

Your Leadership Journey (A DDI course) – ½ Day Training
This half day course is taught by DDI certified instructor, April Schmidt. This session arms a new or prospective leader with the knowledge and skills they need to confront the challenges they face early in their leader career. The course encourages the learner to think about the transitions that newer leaders face and how to handle those challenges. They are introduced to three leadership differentiators that are most important to building a positive reputation as well as contributing to the organization’s success. Certificate of Completion provided. This course is perfect for your new or veteran supervisors/managers.
2020 Dates/Locations: Kansas City – Jan. 8, 8:30 a.m. – 12:30 p.m., St. Louis – Jan. 24, 8:30 a.m. – 12:30 p.m., Rolla – Jan. 21, 8:30 a.m. – 12:30 p.m.

Communicating for Leadership Success (A DDI course) – ½ Day Training
This foundation course for most Interaction Management® courses helps leaders communicate effectively so they can spark action in others. The course teaches leaders the Interaction Essentials they need to handle the variety of challenges and opportunities they encounter every day in the workplace and beyond. Certificate of Completion provided.
2020 Dates/Locations: Kansas City – Feb. 5, 8:30 a.m. – 12:30 p.m., St. Louis – Feb. 19, 8:30 a.m. – 12:30 p.m.

It’s time to sharpen your recruitment and retention efforts and overall workforce development strategies!

Want to attend all the sessions for a reduced rate? Join our Voyager Passport program and attend as many webinars/lunch N learns over the next year. You will also receive $20 off any full day or half-day training. Check out the entire workshop lineup. Don’t wait, because good things only come to those to hustle! Jump start your workforce game today!

Unemployed Workers Connect with Hiring Manufacturers

The state’s MEP center (Missouri Enterprise) celebrated an important milestone this week with a new workforce development program. So far this year, and through the Basics of Manufacturing accelerated training course, Missouri Enterprise and job centers across the state have successfully trained 52 unemployed and underemployed Missourians on manufacturing concepts. With this new set of skills, 70 percent of the participants are now working in jobs at manufacturing companies who were in desperate need of ready-to-work candidates.  The Basics of Manufacturing curriculum includes blueprint reading, basic measuring, manufacturing processes, lean principles, team work, communications, professional behavior, and basic problem solving. Individuals who successfully complete the course will take part in an interview process with area manufacturers on the last day of the sessions.

At a time of nearly full employment, many of the individuals participating in the program have barriers to employment such as transportation, child care, etc. As we continue to move towards full employment, recruiting workers for vacant jobs or for training programs like this one will be even more challenging. 

More information about the program can be found at https://www.missourienterprise.org/blog/264-new-hire-program-accelerated-basics-of-manufacturing-training.

Tricks to Fool Cyber Creepsters

Unlike scary characters like Freddie Krueger and Michael Myers, cyber attackers are real and they don’t just come out during the Halloween season. They lurk around throughout the year, searching for weaknesses in your system.

Mitigating cyber threats takes more than a single anti-virus upgrade; it requires ongoing vigilance. But protecting your systems doesn’t have to be complicated. For Cybersecurity Awareness Month (and all year round), here’s 5 tricks on how to begin…

1.    Limit Employee Access to Data & Info

2.    Install Surge Protectors/ Power Supplies

3.    Patch Operating Systems & Software Regularly

4.    Install & Activate Software and Hardware Firewalls

5. Use Encryption for Sensitive Business Information

Now that we’ve covered some key tricks (click here to read all nine) to protect your valuable data and information, Missouri Enterprise will show you how to install mechanisms for detecting and recognizing a cyber attack. Check out their cyber resilience program on “Five Steps to Reduce Cyber Risks“. As part of the MEP National Network, Missouri Enterprise is the state’s dedicated trusted manufacturing expert and they want to help you protect your company and strengthen manufacturing in the U.S. Register for our upcoming webinar on this topic and learn alongside your team from your operations. DoD supplier? Missouri Enterprise also has a full-day workshop and assessment on Nov. 7 to help you meet federal requirements. Learn more… 

NAM: Monday Economic Report

• New single-family home sales pulled back somewhat, down 0.7% from 706,000 units in August to 701,000 units in September. Nonetheless, the trendline remains very encouraging, with new single-family home sales jumping 15.5% over the past 12 months. Similarly, existing home sales also pulled back in September from the best pace since March 2018 in August, but with 3.9% growth year-over-year. Workforce challenges and low inventory levels were cited as challenges in that release.
• Reduced mortgage rates have helped to buoy recent housing market strength. The average 30-year fixed-rate mortgage ticked higher last week, up to 3.75%. It was near a three-year low as recently as Sept. 5, at 3.49%, but mortgage rates remain well below the 4.94% average reading on Nov. 15, 2018.
• Manufacturing activity remained weak, with global economic headwinds and trade uncertainties continuing to challenge growth in the sector. Along those lines, new durable goods orders fell 1.1% in September, with a decrease of 0.3% if excluding transportation equipment sales. Over the past 12 months, new durable goods orders have fallen sharply, down 5.4%, and core capital goods orders—a proxy for capital spending—have declined 0.8% year-over-year.
• The IHS Markit Flash Eurozone Manufacturing PMI was unchanged at 45.7 in October, the ninth straight monthly contraction in activity and remaining the weakest reading since October 2012. This was led by severe challenges in Germany, which has contracted in every month so far in 2019, but French manufacturers reported a slight improvement in growth, led by recoveries in exports and output and with stronger hiring.
• Manufacturers in the Kansas City Federal Reserve Bank’s district said that activity contracted for the fourth consecutive month in October, with declining paces for new orders, employment and exports. Respondents felt marginally positive about growth over the next six months, but that forward-looking measure dropped to the lowest level since March 2016.
• Meanwhile, the IHS Markit Flash U.S. Manufacturing PMI made progress in October for the second consecutive month following August’s reading, which was the slowest since September 2009. The IHS Markit survey suggests that manufacturing activity might have stabilized recently, with some of the regional Federal Reserve Bank surveys making similar conclusions (including the Richmond Fed release described in this report, but not the Kansas City one).
• Manufacturers will see if the same is true in the Institute for Supply Management® survey out this week, as it has showed contracting activity in the U.S. manufacturing sector, with September’s PMI® at the lowest reading since June 2009. 
• Other highlights this week include the first look at third quarter real GDP and the latest jobs numbers. In addition, the Federal Reserve is expected to cut short-term rates for the third time this year.

NAM: Monday Economic Report

• Manufacturing production declined 0.5 percent in September, falling for the sixth time year to date but following a gain of 0.6 percent in August. The latest decrease was led by a sharp decline in motor vehicles and parts production, down 4.2 percent, which was likely negatively impacted by the strike at General Motors. (A tentative deal was reached last week.) Excluding motor vehicles and parts, manufacturing production fell 0.2 percent in September.
• Overall, the data also continue to reflect struggles in the manufacturing sector related to weaker global growth and trade uncertainties. Manufacturing production has fallen 0.9 percent over the past 12 months, for instance, declining on a year-over-year basis for the third consecutive month.
• Total industrial production declined 0.4 percent in September, and on a year-over-year basis, it has inched down 0.1 percent over the past 12 months. It was the first negative year-over-year reading since November 2016.
• The New York and Philadelphia Federal Reserve Banks both reported expanding manufacturing activity in their districts, albeit with modest growth. Respondents felt positive in their outlook for the next six months.
• Housing starts fell 9.4 percent, down from an annualized 1,386,000 units in August to 1,256,000 units in September. Despite pulling back sharply from the best reading since June 2007, the single-family data continued to be encouraging. Single-family starts inched up from 915,000 units to 918,000 units, the strongest pace since January.
• Meanwhile, housing permits fell 2.7 percent in the latest report, down from 1,425,000 units at the annual rate in August (the best since May 2007) to 1,387,000 units in September. With that said, single-family permits were the strongest since February 2018.
• New residential construction permits have jumped 7.7 percent year-over-year, which should bode well for accelerated housing activity over the coming months. For their part, homebuilder optimism rose to a 20-month high in October. Indeed, would-be homebuyers appear to be motivated by mortgage rates that are near three-year lows.
• Finally, retail sales fell 0.3 percent in September, which was disappointing, but it followed an upwardly revised gain of 0.6 percent in August. Excluding automotive and gasoline sales, retail spending was flat in September. Despite the weaker data in September, retail sales have risen a healthy 4.1 percent over the past 12 months, and overall, consumer spending has continued to be a bright spot in the economy over the past year.

NAM: Monday Economic Report

• Job openings in the manufacturing sector pulled lower in August, even as postings in the sector remained elevated. Manufacturing job openings have pulled back from the all-time high in June for the second straight month, but there was another record figure in postings for durable goods manufacturers. Despite that volatility, manufacturing job openings have averaged a robust 485,000 per month over the past 12 months, and firms continue to cite the inability to find talent as a top concern.
• With that said, softening economic conditions in the manufacturing sector have started to result in weaker hiring growth. Hiring and separations each decreased to their lowest levels in nearly two years in August, but there was net hiring of 19,000.
• For the 17th straight month, the U.S. economy reported more job openings (7,051,000) than the number of people looking for work (6,044,000 in August). That statistic suggests there were roughly 1 million more job postings than there were unemployed people to fill them.
• The National Federation of Independent Business reported that the Small Business Optimism Index fell from 103.1 in August to 101.8 in September, a six-month low, with owners reacting to signs of slowing in the global economy and ongoing trade uncertainties. Yet, index readings greater than 100 would indicate that small businesses remain upbeat overall. The inability to find sufficient workers remained the top challenge.
• The minutes of the Sept. 17–18 meeting of the Federal Open Market Committee noted disagreements about the direction of monetary policy, much as was seen in the statement released at the time. There was a general observation, however, that manufacturing production has weakened year to date, largely due to the “ongoing global slowdown and trade uncertainty.”
• Several FOMC participants felt there could be one more cut in short-term rates this year, with others not feeling that such an action was warranted, especially given strengths in consumer spending and the labor market. I continue to expect the Federal Reserve will cut the federal funds rate by 25 basis points—for the third time this year—at its Oct. 29–30 meeting.
• The Federal Reserve has likely been comforted by decelerated pricing pressures, including the latest data on consumer and producer prices.
• Meanwhile, there was mixed news on the consumer front. On the one hand, the Index of Consumer Sentiment increased for the second straight month, according to preliminary data from the University of Michigan and Thomson Reuters, on an improved outlook for income growth. Yet, U.S. consumer credit outstanding slowed in August, largely on declines in Americans’ willingness to incur more credit card debt. However, nonrevolving debt rose strongly.

Lieutenant Governor Kehoe Promotes Buy Missouri Week

Lieutenant Governor Mike Kehoe announced he will be traveling throughout the state and promoting the Buy Missouri Program during the first annual Buy Missouri Week, October 13th through October 20th. As designated by the legislature, Buy Missouri Week is designed to encourage Missourians to purchase Missouri-made products in support of those who create, grow, manufacture, distribute, promote, and sell goods made in Missouri.

“As I travel throughout the state, I am always amazed at the ingenuity, initiative and creativity of Missourians in all manner of products. Buy Missouri Week is designed to promote products manufactured right here in Missouri. When we buy Missouri-made products, we support our friends, family and neighbors who work at and own these businesses. I am working to grow the Buy Missouri Initiative by continuing to recruit businesses, building an interactive, searchable web-site to help highlight Missouri businesses and cooperating with manufacturers, distributors, and retailers to make Missouri-made products more visible in the store.”

Governor Mike Parson pioneered the Buy Missouri Initiative as lieutenant governor. While in the Senate, Lieutenant Governor Kehoe sponsored Senate Bill 891 establishing Buy Missouri Week. It was signed into law having received overwhelming bi-partisan support in both legislative chambers.

Hear more about Buy Missouri Week from Missouri’s Governor, Mike Parson here and from Missouri’s Lieutenant Governor, Mike Kehoe: here

For additional information, please visit the buymissouri.net website, the Lieutenant Governor’s Office social media and the Buy Missouri social media for more information and how you can become involved.