Want To Know What Is Really Going On In Biden’s Economy, Read This

One can listen to, and believe, the government’s lies about the miraculous growth of the economy and the stellar job that Bidenomics is doing… or one can listen to the truth straight from the countless small companies that make up the economy. We prefer the latter, which is why we love the monthly responses to the Dallas Fed survey, where unlike the other regional Feds, the respondents actually get a fair forum.

So without further ado, here are all the comments in the April Dallas Fed Service Sector Outlook Survey presented unedited and without commentary. Trust us, none is needed (but the highlights are ours).

Truck transportation

• We repair long-haul trucks. The volume just keeps going down, which means everyone is holding back on repairs, so we have no work. Inflation keeps driving our costs up. It’s not looking pretty for trucking.

Support activities for transportation

• We are seeing an uptick in rates and activity. The excess capacity slowly bleeding out of the market is causing this.

Publishing industries (except internet)

• Momentum is still based on intuitive smarter software revisions. Commercial interest is also finally increasing with better relationship contacts to speed credible traction and interest for adoption going forward. We are more focused now on marketing and sales.
• The impact of the higher rate environment seems to be catching up, with general purchase intent among customers flattening out. At the same time, budget cuts and political uncertainty have impacted our public sector business as well, creating additional uncertainty across our business.

Credit intermediation and related activities

• The stress of an election year adds to the concern citizens have about the direction of our economy.
• We recently renegotiated our $600 million debt facility. Our cost of funds went from 9 percent to 14 percent—that’s a pretty big hit to our bottom line and resulted in us increasing prices to our customers.  Our business focus has been on forecasted easing; however, the reality of rates staying higher longer is creating uncertainty.
• Commercial real estate transactions are down by 70-80 percent according to the brokers we talk to, and our loan origination volume reflects that as well. Borrowers are concerned about future business prospects. We recently had a client decide not to take a loan to refinance a warehouse used in their business because they were concerned about their future business prospects. At the same time, the cost of everything we buy, from paper to electricity, is rising.
• The Federal Reserve signaling it will hold the rate at the current level for longer has affected our outlook negatively. One of our biggest issues with inflation is the cost of housing. These high rates do not help that, and prices of everything else are not declining or remaining stable.

Securities, commodity contracts and other financial investments and related activities

• Recent movement in long-term rates, combined with the Fed holding rates longer, have delayed the expected value of investment recovery until 2025 or later.

Insurance carriers and related activities

• We are recruiting experienced insurance professionals, and there is a small pool to draw from, unfortunately. We will keep looking.
• Property insurance and affordability are slowing our growth opportunities.

Real estate

• The increase in treasury yields since last fall has negatively impacted deal-making activity in the income property industry
• We are a real estate broker company and we have about 350 agents. They are independent agents not salaried employees. Our business slows during election years, and high interest rates have hurt first-time buyers.
• Cost of capital is weighing on our customers and decreasing volume.

Rental and leasing services

• We are a construction machinery and material handling dealership. Our business in the first quarter of 2024 was down 2 percent, and the industry was down 12.3 percent. Our manufacturing clients seem almost on the verge of panic, and there is stuff in inventory. We need a guest-worker program to meet our skilled-labor needs long term.

Professional, scientific, and technical services

• Persistent inflation and the Fed potentially delaying rate cuts are causing uncertainty for the second half of 2024.
• We are still worried about the election causing uncertainty in our clients and prompting a slowdown later this year. Some clients are still worried about inflation and are stalling projects because of the volatility in the supply market. Overall, it is tough to make any forecast right now. Our backlog is strong for the next couple of months, but not as far in the future as we would like.
• The market was slower in the first quarter, but it is now in recovery.
• We are increasingly seeing small professional firms shrinking or simply closing up shop. The labor shortage is a major reason for giving up the fight. There’s plenty of demand for professional services, but there is not enough trained staff. Retaining staff is a major headache. Owners nearing retirement are giving it up sooner rather than later.
• Burdensome federal regulations are increasing the cost to do business, such as the so-called “Corporate Transparency Act” and minimum wage increases that just continue to drive inflation.
• General outlook has improved primarily due to our increased investment in marketing and an increase in general business activity.
• We see a slight uptick in transactional matters.
• Trying to factor in how remote-work scheduling impacts the need for space and resources is challenging.
• Competitive labor market remains; it’s harder to recruit great talent; health insurance is increasing.
• We have not been this slow since the Great Recession. This includes Covid. We cannot understate how terrible the prospective real estate market is. People are not filing zoning cases, meaning in two years there will not be construction. Volumes have gone down in the automotive industry. It seems they are beginning to turn around, so we’re hoping.
• This real estate market is hard to figure out. With the 10-year rate still moving in the wrong direction, and the likelihood of a rate cut not coming this year due to inflation and the strength of the economy, we just can’t see the market improving until next year.
• The Fed is now unlikely to cut interest rates; concerns over recession continue.

Management of companies and enterprises

• Overregulation takes away a lot of time and money.

Administrative and support services

• Continued high interest rates, inflation and general economic malaise has caused employers to be very reluctant to hire professional level talent. They may replace talent if they have attrition, but in general, they are very slow to make any new hire decisions.
• There has been a marked decline in requests for quotes for the month. This decline does not fit in our normal seasonal changes.
• The intensity of international conflict and increasing long-term rates certainly raise concerns.
• Geopolitical tensions are creating an uncertain environment. Also, upcoming elections and how this may affect the Fed’s monetary policy is a concern.
• High interest rates have drastically hindered our ability to grow our business, and it looks like a rate cut is not likely happening in 2024.

Texas Retail Outlook Survey

Accommodation

• Between increasing inflation, high interest rates and instability in the Middle East, we are growing more concerned that the upcoming summer travel season will be depressed compared to prior years.
• March 2024 is viewed as a contradiction in that we had several areas perform at or close to expectations and others that were far below. That seems to be the same in April. Difficult to understand what is happening.

Food services and drinking places

• The stalled return to office and the decline of weekday business travel to downtown remain drags on revenue. We see a softening in other meal periods, and we believe it is due to the increase in menu prices. Hiring experienced staff with knowledge remains very difficult. Where did seasoned workers go? Cost of goods sold continues to increase.
• We are still hanging on by a thread after closing one business last month.
• The energy sector continues to be strong, which positively affects my business. Midland continues to attract a younger population.

Motor vehicle and parts dealers

• The margin on new vehicles sold per unit declined 50 percent year over year in March 2024, which was a direct benefit to the consumer.
• We are continuing to see labor shortages in the workforce and a lack of effort to pursue the positions available from those applicants responding to open positions.

Electronics and appliance stores

• Building activity is down still and looks to be getting worse.