My thoughts today spring from this startling statement: nearly 40% of the world’s money supply was added in the last 13 months alone – representing between $2.5 and 3T. Yes, we are “printing money.” What does this mean for inflationary pressure?
I recently listened to a portion of the May 2021 Berkshire Hathaway Annual Meeting at which Warren Buffett spoke on inflation: “we’re seeing very substantial inflation…the cost are just up, up, up. Steel costs, every day, they’re going up… the economy is red-hot, and we weren’t expecting it.” Buffett went on to say, “people have money in their pockets and they pay higher prices…the supply chain’s screwed up for all kinds of people…it’s almost a buying frenzy… Meanwhile, it’s a terrible situation for a percentage of the people. It is not a price sensitive economy right now in the least. I don’t know how exactly it shows up in various pricing indices, but there’s quite a bit more inflation going on than people would have anticipated 6 months ago.”
At its March meeting, the Federal Open Market Committee (FOMC) forecasted that the U.S. inflation rate will average at 2.4% in 2021, then decrease to 2.1% by 2023 That said, the average consumer is experiencing surging prices today in many different areas. Fundamentally, there is pressure on raw materials like steel, lumber, petroleum inputs. The scarcity factor is real. As one example, low inventory and skyrocketing lumber prices have increased the price of a typical new home by nearly $36,000. Making it even more personal, the price of food is creeping higher – and will stay that way for a while.
I went to my favorite economists: Bank of America, Wells Fargo, and U.S. Bank. To a one they are expressing caution – economic growth should be strong, but so too will be inflationary pressures.
The question, then, becomes: how far and how quickly will inflation increase? The Fed is confident in their ability to deal with it. But, as CNBC’s Jeff Cox said so well this past Friday, “If the Federal Reserve’s benign view on inflation prevails, employment will be key”.
We’ll talk about employment next week.
See you in the trenches.
As of Saturday, June 12, our 7-day average of cases is at 169 – lowest since April of 2020. This reflects a positivity rate of 1.4%. At the same time, our vaccination rate is at 55.6% (1 dose) and 48.6% (fully vaccinated) of eligible population. The vaccination pace now is crawling.
Wealthy countries are pledging to donate vaccines: meetings of the G7 began yesterday, and several of these countries are intending to commit 1B vaccines. The U.S. will buy 500M more doses for donation to 92 lower income countries and the African Union over the next year, towards an anticipated need of more than 10 billion vaccinations. At a cost of $5-7/shot, the need represents $50-70B hugely significant and yet it represents less than 1% of the global economic output this year.
SBA to open Targeted EIDL Advance grant to all eligible businesses – one of the few remaining programs that is funded. And the SBA aims to raise the loan limit to $2M.
Twin Cities Restaurant Roundup: Who's opening, reopening and closing
St. Paul’s City Council is proposing a Right to Recall ordinance requiring that hotels and event centers give those who lost jobs during the pandemic the first chance to get rehired. Your Chamber wrote a letter of opposition to Ordinance 21-20 because the ordinance is, in a word, nonsensical. Employers are desperate for workers, and no one we know is deliberately passing over qualified employees. Quite the opposite. This action is not in response to “bad actors.” Instead, beyond the logistics and intrusion of city government into the employer-employee relationships, this ordinance amplifies the vilification of businesses in St. Paul. It implies that there is an action so negative that it requires council response. Sponsored by all seven councilmembers, the proposed ordinance certainly has enough support; stay tuned.
Last week marked the formal kickoff of the #WelcomeBackStPL campaign and the return of Lowertown Sounds. Please check out WelcomeBackStPL for upcoming events and join us!
And Your Chamber wants to see you - please join us!
5 ways companies can embrace the ‘future of work’
A recent study from Accenture found that more than 83 percent of workers say a hybrid office is the optimal route forward.
Inclusion is not someone else’s responsibility. Mark Benton, a VP of Talent Management and Development at McKesson, talks about how it starts
with individual decisions and behaviors.
Cargill investing $6M to support people of color, women students
Target, General Mills, other large companies commit to spend at least 2% of annual media budgets on Black-owned media companies
Customer Expectations for DEI Engagement Are Seeping into the SME Sector
Building capacity for fun -- we are thrilled that the Fair Is On! www.mnstatefair.org
Now that we have seen the last of the COVID-19 restrictions in Saint Paul, the question on everyone’s mind continues to be: “what does ‘return to the office’ look like and when? For your Chamber, our office is back to regular office hours on Monday, August 2. We have missed you and hope you stop by! And in-person events pick up again this Fall as well.
I’m talking to the larger companies downtown, and they are bringing back employees already, on a volunteer basis. The parking ramps are filling up, traffic is increasing – dramatically. But late Q3-Q4 is the target for more mandatory “return to office” plans. Smaller companies seem to be bringing employees back more quickly, many fully staffed in office already. The return, most definitely, is underway.
The issue remains: what will we see when return? The St. Paul Downtown Alliance is programming a calendar of #WelcomeBackStPL events, kicking off this week, on June 10, with Lowertown Sounds. The idea? Come back downtown, experience the activity. The Flint Hills Family Festival already is underway, continuing through June 12. Know you are so very welcome!
I’ve also had conversations with employers who remain tense about public safety downtown St. Paul. And about the increase in people experiencing homelessness. How will these two issues impact our experience as we return? Aah, the crux of the matter. And what is the Chamber’s role in these issues? We are choosing, very intentionally, to participate in the conversations – in the work. We don’t stand outside them; we, too, operate downtown. Instead, we communicate actively with the City, share our members’ concerns, highlight areas that are specific problems, convey updates back to you from the Mayor’s office as we get them. Both are under extraordinary pressure, and are committing every possible resource towards both.
Across the East Metro overall, companies are returning to office more quickly than anticipated. And people are out and about! I’ve been shopping along Grand, through Stillwater, have taken the boys over to Maplewood Mall, Rosedale, and MOA…. and traffic is high wherever I go. And restaurants are full! Clearly, we are experiencing the pent-up demand that is bringing people out.
See you in the trenches.
According to the MDH: as of Sunday, the state has seen daily case counts under 300 for five of the last seven days. Based on test results, that translates to 1.1% positivity rate. Over the last week, the year to day average positivity rate is under 3%. , indicating a low rate of community transmission.
Over 2.9M Minnesotans over the age of 12 now have at least 1 vaccine dose, which is 52.6% of the state’s 12+ population.
The Equal Employment Opportunity Commission (EEOC) has issued new vaccine guidance for employers. But gray areas remain in terms of mandates, incentives, and confidentiality requirements.
So where are we? Nationally, in May the U.S. added a modest 559,000 jobs, an improvement from April - but still evidence of ongoing hiring struggles.
And the recovery continues to be uneven. According to a small survey recently conducted by Alignable, 35% of small businesses might not survive the summer.
And in Saint Paul? It’s really a mixed bag. Construction is strong in 2020 with new rentals, Green Line Development. And yet, a year after riots, 35 of 270 impacted St. Paul businesses remain closed. The private sector and philanthropic community continue to invest in this regeneration: your Chamber, in partnership with the Midway Chamber of Commerce and the Saint Paul Downtown Alliance, so far has distributed over $1M to many of these companies. More work is still underway to inject more capital into the local economy from private sector/philanthropic community investments:
Governor Walz, House Speaker Hortman, and Senate Majority Leader Gazelka say they’d drop partisan priorities to avoid a state shutdown.
That said, nearly 38,000 state employees have begun receiving layoff notices – just in case. And the budget deal includes several provisions left out of their ‘global agreement,’ including additional tax cuts and funding to help Minneapolis and St. Paul rebuild buildings and property damaged in the unrest following the killing of George Floyd last year. On this last point, your Chamber has sent a letter to state leadership strongly encouraging them of the urgent need for such funding.
Read more updates in our weekly Chamber Advocacy Update.
Ordway Center for the Performing Arts to Reopen Its Doors this September! Watch for news on what's included in their season soon.
I’ve saved this article on leadership lessons from 5 outstanding women in business from March, originally written in honor of International Women’s Day. These women have grown their businesses, overcome challenges, and serve as an inspiration for all.
Progress does continue on the Snelling/Midway site. The City is expected to issue a demolition permit within days, to take down the Midway Shopping Center, destroyed last May.