This Week in ESG and Impact Investing

The July 2024 PCE index indicates a 0.2% increase in prices, with a 0.4% rise in real personal consumption expenditures (PCE). The price increase, although modest, could affect minority businesses by reducing profit margins due to higher costs for goods and services. While overall income and spending are growing, the continued increase in spending on essentials like housing and utilities, and motor vehicles may reduce disposable income among minority consumers, potentially leading to decreased demand for non-essential products and services offered by minority businesses. For more detailed information, visit the full release here .

Federal Reserve Chair Jerome Powell's August 23, 2024 speech  was a significant announcement forecasting future Fed interest rate policy. With inflation moving closer to the 2% FOMC target, occurring without a sharp rise in unemployment, the statement set the stage for possible rate cuts in September.  Mr. Powell reviewed challenges to the post-pandemic economy, including supply constraints and demand surges. He noted the Fed's commitment to supporting a strong labor market while gradually easing policy restraints. (See: Does Asymmetric Monetary Policy Exacerbate Asymmetric Outcomes? https://www.impactinvesting.online/2024/06/does-asymmetric-monetary-policy.html .) For several reasons, this approach is particularly relevant to minority firms: 1. Access to Capital: Lower inflation and stable interest rates improve borrowing conditions. Minority businesses, often more reliant on external financing, benefit from easier access to affordable credit. 2. Labor Market Stability: Minor...

Vice President Kamala Harris recently unveiled her economic plan, which builds upon and expands several initiatives from the Biden administration while adding new elements aimed at addressing economic challenges faced by American families. Her plan, dubbed the "Opportunity Economy" agenda, focuses on lowering costs for essential goods and services, particularly targeting housing, healthcare, and groceries. Key Components: 1. Housing: Harris proposes constructing three million new homes to address the housing supply crunch, which is more ambitious than Biden's two-million-home plan. She also advocates for a $40 billion "innovation fund" to encourage local governments to find solutions to housing shortages and make it harder for investment companies to buy up large numbers of rental properties, which has driven up rent prices. (See: Comments to the CalPERS Board of Administration, July 15, 2024 on Housing and Environmental Investing.) 2. Healthcare: Expanding on B...

The Consumer Price Index (CPI) for July 2024 provides important insights into the current inflationary environment, critical for understanding the economic challenges faced by minority-owned businesses. Here's an analysis based on the key points from the CPI release: Overview of the CPI Data: - Overall CPI Increase: The CPI for All Urban Consumers (CPI-U) increased by 0.2% in July 2024, following a 0.1% decline in June. Over the last 12 months, the all-items index rose by 2.9% before seasonal adjustment, marking the smallest 12-month increase since March 2021. - Shelter Costs: The shelter index rose by 0.4% in July, contributing nearly 90% of the overall increase in the all-items index. Shelter remains a significant factor, crucial for minority-owned businesses operating in areas with high rent or property costs. - Energy and Food Prices: The energy index was unchanged in July, following declines in the previous two months. The food index increased by 0.2% for the month, consistent...

Overall, the July 2024 Producer Price Index (PPI) for final demand increased by 0.1% in July, driven largely by a 0.6% rise in the prices for final demand goods, particularly due to higher energy costs. However, prices for final demand services fell by 0.2%, marking a significant shift that could affect various sectors differently. For minority-owned businesses, which are often concentrated in service-oriented sectors, the decline in prices for final demand services could signal reduced revenue potential, especially if these businesses rely on service contracts where prices are under pressure. This is exacerbated by a 1.3% drop in trade services, which measures the margins received by wholesalers and retailers. Minority businesses in retail and wholesale may face squeezed margins, impacting profitability. Conversely, businesses engaged in manufacturing or those that rely heavily on energy inputs may find the increase in energy costs challenging. The 12.9% spike in diesel fuel prices, i...

The potential economic outcomes for minority-owned businesses under a Trump administration versus a Harris administration differ significantly due to their contrasting policy approaches, economic priorities, and historical records. This analysis explores the expected impacts on key areas such as access to capital, regulatory environment, market opportunities, and government support programs. Trump Administration 1. Access to Capital Pros: The Trump administration's focus on deregulation could make it easier for financial institutions to operate fraudulently, but might also increase the availability of loans, at least initially Cons: Deregulation may lead to less stringent lending practices, which could result in higher risks and potentially higher costs of borrowing for minority businesses. 2. Regulatory Environment Pros: A concerted push for reduced regulation might lower compliance costs for businesses, allowing minority-owned enterprises to allocate more resources to growth and ...

In July 2024, the U.S. unemployment rate rose to 4.3%, accompanied by an increase in nonfarm payroll employment by 114,000 jobs. This result reflects ongoing sector-specific dynamics and variations across different demographic groups. Key sectors such as health care , construction, and transportation and warehousing experienced job growth, while the information sector saw job losses. Sectoral Employment Trends 1. Health Care: Continued to show strong job growth , a trend consistent with the increasing demand for health services and an aging population. 2. Construction: Experienced an upward trend in employment, likely driven by ongoing infrastructure projects and residential construction activities. 3. Transportation and Warehousing: Benefited from the sustained demand for logistics and delivery services, partially due to e-commerce growth. 4. Information Sector: Faced job losses, potentially due to restructuring, automation, and the evolving digital landscape reducing demand for tradi...

The second quarter surge in GDP could create more business activity for Black healthcare and affiliated businesses. https://www.blackenterprise.com/alert-new-version-black-healthcare-firms-should-prosper-most-from-growing-economy/