Unclear View of U.S. Economy Complicates Fed’s Task

A hazy picture of the U.S. economy has emerged from the most recent snapshots of retail sales, housing, manufacturing, the job market and the confidence of consumers.

The figures reflect higher borrowing costs, slower hiring and rising uncertainty just before much of the government shut down Oct. 1 – all trends that the Federal Reserve is trying to assess at a policy meeting this week.

Taken together, they portray an economy that was stumbling even before the shutdown, which further slowed growth.

Still, many Americans have managed to keep up their purchases in recent weeks. Their spending has raised hopes that if Congress can reach a long-term budget agreement in coming months, economic growth will pick up.

“One of the things that’s really holding back the economy is this fog of uncertainty,” said Mark Vitner, an economist at Wells Fargo.

One major factor behind the uncertainty: Congress and the White House agreed on Oct. 16 to reopen the government – but only until Jan. 15, when a new deal must be reached. That raises the threat of another shutdown.

Nor is it clear when the Fed will begin to pull back on its stimulus for the economy. And the sloppy rollout of the Obama administration’s health care program has added to the reluctance of many small businesses to hire, Vitner said.

All this has made the Fed’s task of evaluating the economy even harder than usual. The Fed is considering when to slow its $85 billion in monthly bond purchases. Those purchases are intended to keep borrowing rates low to spur growth. Chairman Ben Bernanke has noted that the Fed’s policy decisions are “data dependent.”

Yet most of the economic data that will be released in coming weeks will be distorted by the government shutdown. For example, the October jobs report, due Nov. 8, may show a rise in the unemployment rate only because of the temporary layoff of government workers and contractors.

“This is a very difficult time for the Fed,” Vitner says. “The data is not all that clear, and there are a lot of structural shifts in the economy.”

Those shifts include an aging workforce, which means more older workers are retiring and dropping out of the work force. Their exodus has artificially lowered the unemployment rate, making that key gauge of the economy less reliable. People who are out of work but have stopped looking for a job aren’t counted as unemployed.

The most recent reports the Fed will consider have pointed to a weak economy, though there are a few bright spots:

• Consumer confidence fell to a six month low in October, according to the private Conference Board. The partial shutdown made Americans more pessimistic about future growth and hiring. Lynn Franco, director of economic indicators at the board, said the “temporary nature” of the budget agreement means that confidence could fluctuate in coming months.

• Retail sales rose modestly in September outside of auto sales, the Commerce Department said. Auto sales dropped 2.2 percent, the most in almost a year. But that was mostly because of a calendar quirk that shifted Labor Day weekend sales to August. Sales rose in most other areas, including restaurants, electronic and appliance stores, and sporting goods stories, a sign Americans were willing to spend on items that weren’t essential.

• Higher interest rates and rising home prices discouraged many Americans from buying existing homes in September. A measure of signed contracts reached its lowest level in nine months. The National Association of Realtors’ index of pending home sales fell below the level it had reached a year earlier.

• Orders for most long-lasting U.S. factory goods dropped last month as businesses cut back on spending. The decline suggested that businesses weren’t confident about the economy. And U.S. factories only slightly boosted their output in September, mostly because auto production rose.

• Hiring has slowed. Employers added an average of just 143,000 jobs a month from July through September. That was down from an average of 182,000 in April through June and from 207,000 in the first three months of the year. The unemployment rate dipped to a still-high 7.2 percent in September from 7.3 percent in August.

David Berson, chief economist at Nationwide Financial, noted that rising mortgage rates typically coincide with a strengthening economy and increased hiring. Normally, those additional jobs help offset the dampening effect of higher mortgage rates.

The average rate on a 30-year mortgage rose to a two-year high of 4.58 percent in August and remained near that level in September. It has since fallen back to 4.13 percent.

“But not this time,” Berson said. “This time we only had the rise in mortgage rates. We haven’t gotten the jobs.”

Copyright © 2013 The Associated Press

Government Shutdown Affects Confidence Among Floridians

Florida’s consumer confidence fell sharply in October to 71, a seven-point drop compared to September and its lowest level in nearly two years, according to a new University of Florida (UF) survey.

“This is the lowest reading since December 2011 following the last debt ceiling showdown in August of that same year,” says Chris McCarty, director of UF’s Survey Research Center in the Bureau of Economic and Business Research.

“Confidence among Floridians was already declining prior to any indication of a shutdown and debt ceiling debate,” McCarty adds. “However, there is no doubt that confidence in September took a hit as we replayed the events of August 2011 – the last time the U.S. was precariously close to a default. Much like the rest of the country, Floridians were not happy with the prospect of defaulting on our national debt and a prolonged shutdown of federal services.”

All five components used in the UF index decreased. Respondents’ overall consensus over whether they are personally better off financially now than a year ago fell three points to 62. Their expectations of improved personal finances a year from now was 74 – a decline of six points from September.

The survey-takers’ confidence in the U.S. economy over the coming year dropped eight points to 68, and their outlook for the nation’s economic health over the next five years sank two points to 73. Both components are at their lowest level since December 2011.

Meanwhile, their view that the present is a good time to buy a big-ticket item, such as a vehicle, fell 11 points to 80.

“Respondents age 60 and over registered a 12-point drop in expectations of U.S. economic conditions over the next year, and a 20-point drop in perceptions as to whether it is a good time to buy big-ticket items,” McCarty says. Seniors were the survey’s most pessimistic respondents, possibly because a federal government default would delay Social Security checks and negatively affect the stock market, hurting retirement accounts.

“As the holiday season is upon us, we estimate weaker-than-usual sales as the Florida consumer remains pessimistic, particularly since new debates among lawmakers are due in January,” McCarty says. “The effect of this could be reversed if lawmakers signal agreement on the postponed debt-ceiling debate sooner.”

Conducted Oct. 1-24, the UF study reflects the responses of 411 individuals, representing a demographic cross-section of Florida. The index used by UF researchers is benchmarked to 1966, which means a value of 100 represents the same level of confidence for that year. The lowest index possible is a 2; the highest is 150.

© 2013 Florida Realtors®

Webinars Set Up For How Healthcare Rules Will Impact Small Businesses

The U.S. Small Business Administration (SBA) has scheduled two webinars intended to help small business owners understand the law and the new rules that impact them under the Affordable Care Act.

The online meetings take place on Oct. 24 and Oct. 31 at 2 p.m.

Discussion topics include:

• Small business tax credits (available to businesses and tax-exempt non-profits) – who’s eligible for them and how to claim them
• Marketplace updates
• Shared responsibility
• Cost containment
• Tools and resources available for small businesses interested in learning more about the law

A question and answer period will follow. To sign up, click on one of the links below:

• Oct. 24 at 2 p.m.
• Oct. 31 at 2 p.m.

© 2013 Florida Realtors®

Small Business Owners Poised to Switch to Growth Mode

The Fall 2013 American Express OPEN Small Business Monitor research suggests that business owners have abandoned their “wait and see” approach, with a third (32%) of entrepreneurs making growth a top priority.

More small business owners are making capital investments (54%, up from 49%) and hiring plans are up (35%, up from 29%) year-over-year. Entrepreneurs are also in a stronger position to increase investments as cash flow becomes less worrisome (52% reported a cash flow crunch, down from 59% six months ago).

Attitudes about the U.S. economy have also changed, with less worry potentially leading to more investment.

The survey found that fewer business owners believe the economy is in recession (25%, down from 36% last fall). When asked about their six-month outlook, more than half (56%) have a positive expectation about business prospects and more than four-in-ten (43%) believe their revenues will increase. Currently, nearly four-in-ten (38%, up from 27%) say revenues are greater than a year ago, and 16% say they have more employees than they did last year, compared to 8% in fall 2012.

“Small business owners appear poised to flip the switch to growth mode,” said Susan Sobbott, president, American Express OPEN. “Business owners are getting more targeted in their approach to building customer demand and an increasing number are using analytics to better understand their customers and social media to drive sales.”

Read more at Florida Realtors®

Apartment Demand Soars, Rents Constrained

Apartment vacancies fell by 10 basis points in the third quarter to 4.2 percent, according to a preliminary look of the ReisReports third-quarter market report for the apartment, office, and retail sectors. Asking rents increased by 0.9 percent in the third quarter. But the high demand won't automatically mean rent increases.

“Despite the persistent strength of the apartment market recovery, rent growth is being held in check by a still-weak recovery in the economy and the labor market,” according to ReisReports. “Too few jobs, many of dubious quality, and too little income growth are constraining landlords’ ability to raise rents.”

The office sector also posted declines in vacancies, falling by 10 basis points in the third quarter to 16.9 percent. The struggle in the labor market continues to constrain demand for office space, the report notes.

Meanwhile, Reis data backed up recent media reports of a sluggish recovery in the retail sector. Vacancies for neighborhood and community shopping centers were at 10.5 percent in the third quarter, falling 30 basis points year-over-year.

“Neighborhood and community center rents lost a lot of ground given the severity of the recession and the sluggish recovery,” the report notes.

Some submarkets in retail are showing signs of growth, but they tend to be insulated in wealthy neighborhoods. Other neighborhoods are still facing empty, older spaces from businesses that closed or moved elsewhere.

In general, malls are posting a stronger recovery than shopping centers. National vacancies in shopping malls are falling at a faster pace than neighborhood and community shopping centers, Reis reports. Mall vacancies stood at 8.2 percent in the third quarter, dropping 10 basis points from the second quarter.

ReisReports will officially publish its quarterly market report for the third quarter Nov. 1.

Source: Reis

How Do You Measure the Value of Social Media Marketing?

There are many ways to measure a company’s return on investment in social media. Effective methods often depend on how small-business owners are using social media and for what purpose.

The “amplification model,” also known as the purchase equivalency calculator, is used to measure the value of social impressions, which is how many people have seen the content, and actions, such as clicking on a link or sharing information, said Jim Tobin, founder and president of Ignite Social Media, a social media marketing agency in Cary.

The amplification model doesn’t calculate return on sales from marketing. It shows the value of impressions and actions and compares them to the cost of buying that level of activity through traditional advertising means, Tobin said.

Using the amplification model, look at your number of organic impressions on Facebook, Twitter or blog post. Facebook Insights is one of several tools that can track views and interactions.

“We can calculate the number of impressions that our organic efforts, such as our updates, have generated,” Tobin said. “And we can put a value on them by multiplying by the common cost per thousand impressions.”

For a highly targeted online media buy, such as one on Facebook and Twitter, impressions easily cost $10 per 1,000, Tobin said.

Owners can also measure actions that are more valuable than impressions, such as if someone reacts to a post, shares it or actually clicks on a link.

“So we could begin to say ‘What’s a click worth?’” Tobin said. Owners can determine that by looking at what marketers pay on the cost-per-click model, which can vary.

If a company knows it spends an average of 50 cents per click for a website, such as Google, or 20 cents per view from YouTube advertising, then look at social media analytics and figure out how much the social media clicks are worth.

“So by doing all this, you can begin to add up the value of the exposure you are generating if you were to buy it,” Tobin said.

Copyright © 2013 The News & Observer (Raleigh, N.C.) Distributed by MCT Information Services.

Upturn in Lending for Commercial Properties

Many U.S. banks are starting to see new growth in commercial property loans, according to research from SNL Financial, which estimated $991.2 billion in total volume as of June 30. The tally is 3.3 percent higher than at the same time last year.

"More banks are now on the offense — not on defense anymore — when it comes to commercial real estate," said Raymond James Financial Inc. banking analyst Anthony Polini.

Lending for apartment buildings, offices, retail centers, and industrial properties took a hit when the economy soured but is starting to pick up again now that real estate values are on the rise and credit quality is improving.

Source: "Commercial-Property Lending Begins to Ramp Up," The Wall Street Journal (Oct. 15, 2013)

Businesses For Sale in Sarasota, Florida

KW Business has several businesses for sale in or near Sarasota, Florida spanning several different sectors. Check out our listings by clicking the link below.

Click Here to See My Business Listings

Planet Beach Contempo Day Spa For Sale in Sarasota, Florida

Asking Price: $95,000
Gross Income: $160,351
Cash Flow: $33,296

Contact Ian Harding
Telephone: (941) 725-1468

Email Me
Visit My Website




Business Description
Planet Beach Contempo Spa located in Sarasota. Customers pay a low monthly membership fee for unlimited fully automated, push-button spa services in a private room without the need of an attendant. These rejuvenating wellness services include four types of massages, two types of facials, hydration treatments, teeth whitening, guided meditation, oxygen therapy, weight management treatments, therapy and Mystic spray tans. Planet Beach also offers a wide range of skincare and nutrition products.


Detailed Information 
Facilities: Business is located in a busy strip mall in a leased premises of 1500 sq ft fully fitted out with modern automated day spa equipment. 

Competition: Franchise territory with little direct competition in automated day spa treatments. 

Financing: $25,000 at 6.5% for 60 months. 

Support/Training: Seller will train for 2 weeks at no cost to Buyer. 

Reason Selling: Other Business Interests.

High-profile, Luxury International Event Business in Sarasota, Florida

Asking Price: $750,000 
Gross Income: $1,238,571
Cash Flow: $261,704 

Contact Ian Harding

Telephone: (941) 725-1468

Email Me
Visit My Website



Business Description
High-profile, luxury international event & entertainment business based in paradise! This business has a worldwide reputation and offers extreme flights, space adventures, shark dives, military adventures and more. The company maintains a full-time staff in Sarasota & Moscow and a worldwide network of experts ready to fulfill your adventure dreams. The business owns around 70 web domains for its high-traffic websites, and maintains a large database of wealthy, loyal individual and corporate clients.

Detailed Information

Facilities: Business is run from an office in Sarasota, Florida with an additional office in Moscow, Russia and a network of experts around the world.

Competition: Niche event & entertainment business with discerning clientele make this a unique offering.

Growth/Expansion: There are numerous sell-on services to existing loyal client base that a new owner could exploit.

Support/Training: Seller will provide 4 weeks training at no cost to Buyer.

Reason Selling: Other Business Interests.

Social Media Tips for Small Business

Tweet, Vine, Pin, Post. Update a blog. Like a Facebook status. Network via LinkedIn. There’s myriad options for small business owners to connect with customers, peers and others via digital media.

Yet, these entrepreneurs also have to balance budgets, keep track of accounts receivable, manage payroll and sell their products and services.

With limited time and financial resources, it can be incredibly difficult to figure out the most efficient and effective ways to embrace the rapidly expanding digital world.

If a small business owner shuns social media, he or she could miss out on big marketing opportunities. But if too much time is spent seeding such sites, other important duties could fall by the wayside.

If done consistently and strategically, entrepreneurs can use digital media to bolster brand awareness, improve customer relations and boost sales, say marketing and small business experts. This year, average digital media usage among U.S. consumers is estimated at nearly 15 hours per week, according to researcher PQ Media. By 2017, it’s expected to hit 19.30 hours per week.

“This is where your customers are,” says Sabina Ptacin Hitchen, co-founder of Tin Shingle, an online community and resource provider for small business owners.

But even as digital media use grows, there are firms staying on the sidelines. One in 10 small businesses don’t have a website, according to the National Small Business Association’s 2013 Technology Survey. Nearly 30 percent don’t use social media.

A major issue for small businesses is deciding which platforms to embrace – as well as what potential time and money-sucking options to weed out.

One must-have: a presentable website. “You don’t need to have a flashy or super-slick website,” says Katie Vlietstra, director of government affairs at the National Association for the Self-Employed. It just has to be “clean and updated.”

When it comes to choosing from the wide array of social-media choices, firms should first focus on channels that mean the most to their businesses, advises Jeff Sweat, director of PR and Social Media for ad agency Deutsch LA.

A business-to-business company may want to begin with a presence on LinkedIn, for instance, while a consumer-oriented company may want to post a profile on Facebook.

“Pick your battles,” he says.

Companies should check out the digital resources that others in their industry are using – competitors included – to see if those platforms would fit in with their own business plans, says Sweat.

The most vital social-media sites? Ptacin Hitchen points to Facebook, Twitter and LinkedIn.

Once a business opts in to social media, it must maintain an active presence, she says. It’s not enough to create a profile and update it once in a while. Aim for daily updates – and don’t just focus on company news.

“Don’t just talk about yourself all the time,” she says “Share information; ask questions.”

For the already over-taxed entrepreneur who can’t fathom the idea of adding another job to the daily to-do list, Ptacin Hitchen offers this advice: “Instead of seeing it as a burden, think of it as a gift.”

Small businesses can use social media to share interesting industry news, promote new products and solicit consumer feedback. If done right, those social-media followers will likely become evangelists for the brand, she says.

“Sure it takes time, but it is time well spent,” she says. “In the beginning, you may not love it. It may be a challenge. But most people learn to really enjoy it.”

Some guidelines on how a small business can survive – and thrive – in a digital world:

• Google your company name and brands. Online search is a major way that people do research, and companies should be aware of what results arise when their names are plugged in, says Don Sorensen, founder of online reputation management firm Big Blue Robot. Businesses should also set up Google Alerts with relevant keywords to stay on top of online mentions.

• Monitor your mobile presence. Nearly six in 10 American adults own smartphones, according to the Pew Research Center. Three in 10 own a tablet. In a world with rising mobile access, small business owners should be sure that their websites present well on mobile devices, says the National Association for the Self-Employed’s Vlietstra.

• Pass out profile information. An easy way to get more social-media followers: Add a company’s Facebook and Twitter information to business cards and e-mail signatures, says Ptacin Hitchen.

• Find interesting tie-ins. Savvy small businesses should associate some posts to trending or topical issues, says Sweat. For instance, all-natural food makers can put out recipes that fit in with an upcoming holiday or tout events that celebrate fare that isn’t made with genetically engineered ingredients.

Copyright USA TODAY 2013

Slow Recovery for Strip Mall Market

Empty strip malls still plague U.S. shopping centers, as the commercial sector continues to struggle with oversupply from last decade’s housing boom, according to a report from Reis Inc., a real estate research firm. 

"Retail is incredibly sticky," says Victor Calanog, Reis’ chief economist. "I don't know what you do with these retail centers. As long as you’re pulling in some money from existing tenants, a lot of them limp along."

These shopping centers—which are usually anchored by supermarkets and large drug stores—are continuing to confront competition from online shopping and struggling to find ways to co-exist.

The national vacancy for strip malls stood unchanged at 10.5 percent in the third quarter compared to the second quarter. It was down 0.3 percentage points from a year earlier, according to Reis figures. The vacancy rate was only 0.6 percentage points off the peak rate of 11.1 percent that was reached two years ago.

Developers have been shy about building, too. New space being added to the strip mall supply so far this year is only 3.6 million square feet—on track to set a 32-year record low that had been originally set in 2010 with 4.5 million square feet of new space, Reis says.

Still, asking rents were on the rise, edging up 0.3 percent to $19.25 per square foot, according to Reis.

Source: “U.S. Still has too Many Strip Malls: Report,” Reuters (Oct. 2, 2013)

U.S. Spending Boosted by 0.3% in August

U.S. consumers increased their spending slightly last month as their income grew at the fastest pace in six months. The figures point to only modest economic growth in the July-September quarter.

Consumers’ spending on goods and services rose 0.3 percent in August, the Commerce Department said Friday. That’s up from a 0.2 percent gain in July, which was slightly more than the 0.1 percent reported last month.

Income rose 0.4 percent in August, the best gain since February and up from a 0.2 percent July increase. Private wages and salaries rose 0.5 percent, while the government wages and salaries rose 0.2 percent.

The government figures would have been higher if not for forced federal furloughs that reduced wages and salaries by $7.3 billion.

Consumer spending drives 70 percent of economic activity. Many analysts say the increases in consumer spending and income are not enough to accelerate economic growth in the July-September quarter from the 2.5 percent annual rate in the April-June quarter.

Paul Ashworth says the economy is growing at an annual rate of 2 percent to 2.5 percent, based on the figures. And the pickup in August could signal stronger growth ahead in the final three months of the year.

But other economists predict the economy is expanding at a rate below 2 percent.

Americans saved some of the extra money they earned last month. The personal savings rate edged up to 4.6 percent of after-tax income, a slight improvement from 4.5 percent in July.

Consumers are benefiting from mild inflation. An inflation gauge tied to consumer spending showing an increase of 1.2 percent over the past 12 months, well below the Federal Reserve’s 2 percent target. Some Fed officials have argued that the central bank should not start reducing its support for the economy until inflation has risen closer to the Fed’s target.

A recent spike in interest rates and mixed signals from the job market were key reasons the Fed decided held off last week on reducing its $85-billion-a-month in bond purchases. The Fed also scaled back its economic growth estimate for this year and next.

There are some signs that consumers may be better positioned to step up spending soon.

The number of people seeking unemployment benefits has sunk to its lowest point in six years because few companies are laying anyone off anymore. That has led some economists to predict that employers added 200,000 jobs or more jobs in September — the most since February.

And gas prices are falling again. The average national price for a gallon of regular gas on Thursday was $3.43. That’s 11 cents cheaper than a month ago and the lowest since January.
Copyright © 2013 The Associated Press