Looking at Biden’s influence on business finance

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A week from today will be Donald Trump’s first full day in his second term as president. He brings to the Oval Office policy proposals that could have immediate impacts on business finances: Expanding (and expanding) corporate tax cuts, fewer regulations, tariffs on imported goods and deporting illegal immigrants. What these will do to the bottom lines of businesses and the American economy in general remains to be seen.

But while President Joe Biden’s time in office is coming to an end a prime time to look back on the business and economy under his leadership. The last monthly employment figures of his term were released last Friday and were much better than expected. According to the Labor Department, the US added 256,000 jobs in December, beating economists’ estimates of 153,000 by 67%. Those numbers put the national unemployment rate at 4.1%, down a tenth of a percentage point from November. That report closes a largely successful economic term in office, he writes Forbes’ Derek Saul. The unemployment rate of 4.1%—6.7% when Biden took office—is the lowest at the end of a president’s term since Bill Clinton left office in 2001. During Biden’s four years in office, average hourly wages rose 19.6 %, from $29.84 to $35.69 now.

But high inflation hurt Biden’s economic recordwith a total increase of 20.8% in the consumer price index during his term. While inflation has moderated this year, reaching 2.7% in November and prompting the Federal Reserve to cut interest rates three times in the final quarter of 2024, the high inflation of recent years—coupled with constant (and (not always fact-based) campaign trail claims about Trump’s weak economy — led 59% of Americans to say the U.S. has lost ground in economic progress over the past four years in a poll Gallup news.

The Biden administration, too stopped some high-profile the unions. This frustrated businesses and investors, potentially wiping out opportunities for business expansion and payouts to shareholders. But much of it was done with the goal of keeping the business more consumer-friendly (with the exception of Nippon Steel’s proposed acquisition of US Steel, which was halted for national security reasons), which may have been more an aid to the economy. a whole.

Several news organizations have written the variations THE same story in recent weeks: “Bidenomics” kept the US economy in good shape during a period of global economic uncertainty, even if ordinary people haven’t noticed. Trump will inherit a relatively strong economy, for which he can take full credit. However, it also has a daunting challenge: keeping things up and running, for businesses and ordinary people alike.

ECONOMIC INDICATORS

Despite the positive indicators in today’s economy, Fed officials fear that inflation may not come down to their 2% target anytime soon. Trump has proposed sweeping changes to trade and immigration policy, including enacting tariffs on many US trading partners and mass deportations of illegal immigrants. “The effects of potential changes in trade and immigration policy suggested that” the return to 2% inflation “may take longer than previously anticipated,” according to minutes from the mid-December meeting released last week. “Almost all” Fed officials “judged that upside risks to the inflation outlook had increased,” the release said. Only one reduction in interest rates is expected to occur in 2025.

A stronger-than-expected labor market and the Fed’s cautious stance on rate cuts contributed to a general market sell-off on Friday. A booming job market means that the economy is doing well without interest rate cuts to stimulate it. “The Fed’s tapering cycle is over,” Bank of America economists led by Aditya Bhave wrote in a Friday note to clients, calling the December jobs report “gangbusters” the “straw that broke the camel’s back.” Stocks are up a bit this week, but most markets are down.

However, 2024 wasn’t all about job growth. According to a report from Challenger, Gray & Christmas, US companies cut 761,358 jobs last year—the most since 2010 (not including job losses related to the Covid pandemic in 2020). The technology sector saw the most job losses, with a total of 133,988 – more than double the number of cuts in the next largest sectors: healthcare, automotive, services and consumer products.

DIRECTED NEWS

There were fewer noisy cash registers, but Record levels of spending kept businesses happy for the holidays. According to Adobe, people in the US spent a record $241.4 billion on e-commerce sales in November and December, an increase of 8.7% compared to 2023. Forbes senior contributor Joan Verdon. Spending was done on more than 1 trillion visits to retail sites, and more than half of all spending — 54.5% — was done using smartphones.

Adobe was found IT greatly affected spending. Generative AI-powered chatbots suggesting links to retail sites drove a 1,300% increase in traffic to them this year. And a consumer survey by Adobe found that seven in 10 consumers who used these enhanced chatbots felt they improved the shopping experience, with about a fifth using generative AI to find the best deals or find special items . About 15% said they used AI to get product information.

CONSIDERABLE PROFITS

In its earnings report last week, it appears Walgreens Boots Alliance CEO Tim Wentworth’s turnaround plan may be working. Its sales grew significantly in the last quarter – 7.5% overall and 6.6% in the US. Forbes senior associate Bruce Japsen. The store posted a quarterly loss of $265 million in its report, but Wentworth said that came from the program of store closures already underway and the sale of its stake in drug distributor Cencora. Walgreens is also working toward selling its stake in primary care company VillageMD, which has lost Walgreens billions.

Walgreens has consistently dropped a report at Wall Street Journal Last month the drugstore chain was in talks to sell itself to private equity firm Sycamore Partners. Japsen writes the retailer Executives didn’t even discuss the issue on last week’s earnings call. Wentworth said the latest quarter marked the beginning of “advancement on opportunities that we consider critical to our long-term turnaround.” Analysts and investors responded positively to the progress, with share prices jumping as much as 29% after the earnings report — likely beyond the reach of private equity buyers, Japsen notes.

deep dive

How L.A.’s small businesses can get $2 million in aid — even if they’re not out of business

The fires that have broken out around Los Angeles have been devastating for tens of thousands of residents and businesses. As of Tuesday morning, more than 38,000 acres had burned in four wildfires around Los Angeles, destroying more than 12,300 structures. Thousands of businesses are among the victims; Forbes’ Brandon Kochkodin writes about the more than 1,000 businesses that called the now-defunct Palisades neighborhood home.

But in a devastating event as widespread as the fires in the Los Angeles area, even businesses that escaped the flames can be deeply affected. Many regular customers may not patronize businesses in the surrounding areas – those that people who live there often visit, or B2B businesses that supply them in the burn areas. Other businesses have seen power and water shortages so they can focus their efforts on fighting the fires. The Small Business Administration’s disaster loan program can help all affected businesses get back on their feet, Kochkodin writes. The SBA offers direct loans of up to $2 million at rates as low as 4% to businesses that have suffered physical or economic damage due to a declared disaster. The term of the loan can be up to 30 years and there is no need for the applicants to obtain approval from the bank.

Disaster loans are just one program that the SBA handles. Kochkodin writes that interest is growing in the popular 7(a) program.which allows borrowers to secure up to $5 million, with low down payments and long repayment schedules. So far in the current fiscal year, which began Oct. 1, loan approvals under the program totaled $8.8 billion, a 38% year-over-year increase. These loans are often used to finance acquisitions of existing businesses, and a rule change last year allowed more of this type of borrowing. Another rule change last month allowed SBA borrowers to structure purchases as asset deals and allow former owners to retain some of the equity, making them more popular.

Counselors who work with SBA loans told Kochkodin that changes to purchase rules are driving some of the increased interest in its programs. There are also more borrowers who benefit of two programs that fall under the 7(a) umbrella that offer small loans with financing up to $500,000 and quick access to revolving credit.

FACTS + COMMENTS

Class action settlements last year were the third highest in a decadeaccording to an annual report from the law firm Duane Morris.

42 billion dollars: Total amount of class action settlements in 2024

$23.4 billion: Settlements for product liability cases, almost three times more than for antitrust, area no. 2

“These cases can affect a company’s market share and reputation in a significant way, creating significant pressure”: Why the report says class action lawsuits can be difficult to handle

STRATEGY + ADVICE

Leaders are not all powerful, and you don’t have to try to look like that. Here are ways to show your weaknesses—and help your team get stronger along the way.

It’s one of you 2025 resolutions to build your personal brand? Here are nine trends to consider when putting yourself out there.

VIDEO

Quiz

Federal financial regulators accused which financial services company of “defrauding” millions of customers of more than $2 billion in interest by freezing fees on their accounts?

A. Citibank

B. Capital One

C. Bank of America

D. Wells Fargo

See if you got it right here.