The America 250 Issue - The numbers this week, this week in 1776, and The Greatest Start-Up Ever
America 250 Issue
This Week in the Economy
By many accounts this week, the economy is doing OK.
New unemployment claims came in at 215,000, which is pretty much average.
Anything between 200,000 and 230,000 is perfectly acceptable, except for the folks who filed the claim.
2018 averages were 218,000, and 2019 averages were 220,000.
Piggybacking off last week's New Housing Starts, New Home Sales continue to fall. This month, the annualized number was 580,000. The long-term average is roughly 650,000.
The weakness is in the west with a 27% month-over-month decline, whereas the Midwest and Northeast showed gains.
In California, by many accounts, it’s over $125,000 in fees per lot before you can put a shovel in the ground. I would think homes would become more affordable if the price were $100,000 less. Just sayin’.
A key measure of inflation, the PCE – Personal Consumption Expenditures – index for May was released. In April, it was 3.8%; this month it was 4.1%. That’s twice the 2.0% target. No bueno.
Core PCE – the numbers without energy and food costs built into it – was up 3.4.%, up from 3.3% the month before.
That’s still higher than the 2% Fed target.
Financial Services and Insurance were up 1.2% month over month. That’s a high number, but for anyone who has insurance on anything, it’s nothing new.
I think I’ll dig into the next CPI numbers a bit more the next time they come out. CPI tends to be more granular than the PCE. Boy, that sounds very nerdish.
And wrapping up this section, the Purchasing Managers Index – PMI – for both Manufacturing and Services, was in positive territory.
Manufacturing was 55.7, and Services was at 51.3.
Since they are both above 50, that signals continued expansion.
Manufacturing was goosed by the fastest outputs recorded since 2021, and new orders have the largest increase since 2022.
However, the hiring isn’t there, which suggests increasing productivity to get that output done.
While the Services number was up, we’ll have to wait until after the World Cup to see how much of that was related to the Scottish fans drinking Boston dry.
This Week in 1776
Jefferson’s draft of the Declaration of Independence was approved by the Committee of Five and presented to Congress.
Yes, a congress of a country that didn’t exist. Except it was about to.
Up to this point, independence was more of a political movement. Now it was in writing.
Congress began debating and editing each section.
Over the next couple of days, they cut about 25% of the committee’s text.
In the meantime, 30,000 British troops are preparing to engage Washington’s army. It’s a race against time. Why?
It’s not an army thing, it’s a political thing. Once the Brits make their entrance in New York, some colonies may back out; Congress needs the votes now before some folks change their mind after a bunch of cannonballs go through their storefront.
Kind of like your competitor coming back and undercutting your offer.
Or George saying: “I say, it would be a bit of a disgrace if something untoward happened to this towne of New York, don’t you agree?”
It’s time to sign on the dotted line, authorize the paperwork, seal the deal, put pen to paper, or whatever other euphemism you want to use.
Most of all, it’s time to make a choice about the future.
On July 2, 1776, the Second Continental Congress approved Richard Henry Lee’s resolution, which was made back on June 7. It then voted to declare independence from not-so-Great Britain.
They spent the next day working out details, like deciding which duplicate positions would be eliminated (King George, General Sir William Howe, among others), company name and logo (no Union Jack), marketing, etc.
The formal Declaration of Independence was adopted on Thursday, July 4, 1776.
The Greatest Start-Up Ever
Many of you on this distribution list are business owners, but why are you a business owner? Most of you, at some point, worked for someone. You had a boss, and you worked for a company. And it wasn’t yours.
One day, the revelation set in that you could do what they were doing, and you could do it better, faster, cheaper, or with a better attitude. And so you did. You started your own company and declared your independence from the company or boss running your life.
Just like you, the Founding Fathers felt the same way. They could do it better, and they did, just like you.
But not without considerable risk. Just like you.
One day, you got your last, steady company paycheck; the next, you were working to create that unsteady cash flow that you now call your business.
As one business owner told me, “You work 80 hours a week, so you don’t have to work 40 hours for someone else.”
Thomas Jefferson, George Washington, Benjamin Franklin, John Adams, John Jay, Patrick Henry, and many others had families that depended on them, just like your family depends on you. If you were married, that was a long conversation with your spouse—“Do I go out on my own?” Crazy, right?
On July 4, Congress approved the final wording of the Declaration of Independence . They began printing it and distributing it on social media, making it public.
Kind of like when you told your boss to take this job and…
Fun Fact: The first copies were printed by Philadelphia printer John Dunlap. 300 copies were made, and 26 are known to survive.
Kind of like the first business cards you had printed.
The day the Founding Fathers declared their independence from England, these new, thirteen United States, with its brand-new territory, became the competition to England, just like you became the competition to your former employer.
And, like you, these 13 states, with their 56 delegates, had a business plan.
It started with “The unanimous Declaration of the thirteen united States of America, When in the Course of human events…”
The second sentence may be the most well-known:
“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain inalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.”
Then it lists 27 grievances.
It was not a good performance review of King George.
The last sentence: And for the support of this Declaration, with a firm reliance on the protection of divine Providence, we mutually pledge to each other our Lives, our Fortunes and our sacred Honor.
Think about that last one for a minute. I mean, really think about it. Those weren’t superlatives from social media influencers. They were words with meaning behind them.
They even had to form a partnership with France, a potential competitor, to prevent their former employer, England, from successfully enforcing the non-compete clause.
And 250 years later, here we are.
As a business owner, you are constantly pivoting, trying new things, hiring new people, hitting walls, and then going over them. No matter the obstacle, you hurdle it because failure isn’t an option. Just like the 56 signatories of the Declaration of Independence, you may have also felt the full wrath of your former employer. But like many business owners, you have a firm reliance on the protection of divine Providence.
And for that, you have my greatest respect. Thank you.
On Wednesday, July 1, the USA plays Bosnia in the first knockout round of the World Cup. Loser goes home.
Three days later, on Saturday, the USA celebrates the 250th anniversary of its independence. A three-day weekend is always welcome, but take a moment to go down the Wikipedia rabbit hole of the Founding Fathers, the Declaration of Independence or the Continental Congress.
Whatever you are doing Saturday, make it memorable because when your grandkids ask what you did for America’s 250th birthday, you want to be able to tell them. And for goodness' sake, see a fireworks show, not a drone show!!
God Bless the USA!
