This Week in ESG and Impact Investing

  The December 2024 Consumer Price Index (CPI) indicates a 0.2% increase from November, contributing to a 2.6% rise over the past 12 months. This inflationary environment presents both challenges and opportunities for minority-owned businesses. Impact on Minority Businesses by Sector Asian-Owned Businesses Relevant Industries: Technology, Professional Services, Retail, Hospitality, and Food Services Technology & Professional Services: Asian-owned businesses in tech and consulting are moderately affected by inflation. Rising operational costs, such as wages and office space, require careful cost management. They can leverage remote work trends and digital platforms to optimize resources. Retail & Hospitality: Higher food costs (+0.2% in December) and shelter costs (+0.4%) directly affect Asian-owned restaurants and hotels. Adopting efficient supply chains and energy-saving measures can help offset these increases. Strategic Insight: Diversifying offerings, such a...

The November 2024 Consumer Price Index (CPI) report highlights inflation trends that carry several significant implications for minority-owned businesses. These businesses, often operating with tighter margins and more limited access to capital than their counterparts, are disproportionately affected by changes in key economic indicators.  Key Findings and Implications 1. Overall Inflation Increase:    - The CPI for All Urban Consumers (CPI-U) rose by 0.3% in November, following a steady 0.2% increase in prior months. This marks a slight acceleration in inflation, with the 12-month rate rising to 2.7%.    - Implication: While this increase remains moderate, it signals persistent inflationary pressures. Minority businesses may face higher costs for goods and services, potentially squeezing profitability unless they can pass on these costs to customers, which may be difficult in price-sensitive markets. 2. Shelter Costs:    - The shelter index increased ...

The September 2024 Consumer Price Index (CPI) shows a year-over-year increase of 2.4%, with core inflation, excluding food and energy, rising by 3.3%.  This slower pace of inflation cooling presents mixed impacts for minority-owned businesses. While reduced energy costs (down 1.9% for the month) could ease operational expenses, rising food prices (+0.4%) and core inflation might continue to strain consumer demand and profitability, particularly for businesses in food services or retail. The inflationary pressures are also likely to affect pricing strategies and cost management as these businesses navigate a still-challenging economic landscape.

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 .

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 ...

On July 25, 2024, the Bureau of Economic Analysis (BEA) released the first estimate for Gross Domestic Product (GDP) for Q2 2024 and GDP by industry. These indicators provide critical insights into overall US economic health and have significant implications for minority-owned businesses. GDP Growth and Minority Firms:  The estimate for GDP in Q2 2024 indicates a growth rate of 2.8%. This is a good sign, suggesting the economy is expanding at a faster clip than most economists expected. For minority-owned businesses, higher economic growth should lead to greater availability of credit and investment opportunities, vital for the sustainability of minority enterprises. Still, the benefits of this growth is not equitably distributed . Minority-owned businesses face increased competition without proportional access to the resources needed to compete effectively. Industry-Specific Insights:  Industry data for Q2 2024 reveals sector-specific performance that is crucial for underst...

The Producer Price Index (PPI) for final demand increased 0.2 percent in June, following a period of stability in May and a 0.5 percent rise in April, as reported by the U.S. Bureau of Labor Statistics. Over the past 12 months, the index for final demand rose by 2.6 percent, well below the 11.7% increase in March, 2022. Breakdown of June's PPI Changes: Impact on Minority-Owned Firms Minority-owned firms, which often operate in sectors such as retail, transportation, and warehousing, can be significantly affected by fluctuations in the PPI: 1. Retail Sector: The rise in margins for trade services and retailing, including automobiles, fuels, and lubricants, could lead to higher costs for minority-owned retail businesses. This could squeeze profit margins unless these costs can be passed on to consumers. 2. Wholesale Trade: Minority firms involved in machinery, vehicle, and professional equipment wholesaling might benefit from higher margins. However, those dealing in machinery and eq...

Chart of the Consumer Price Index, June 2024 . The June, 2024 Consumer Price Index for All Urban Consumers (CPI-U) declined by 0.1 percent on a seasonally adjusted basis, following no change in May. Annually, the all items index saw a 3.0 percent rise before seasonal adjustment. Key Changes in CPI Components: - Gasoline: Prices fell by 3.8 percent in June, building on a 3.6 percent decline in May, contributing significantly to the overall decrease in the index. - Energy: Overall energy costs declined by 2.0 percent for two consecutive months. - Food: There was a modest increase of 0.2 percent in June, with food away from home rising by 0.4 percent and food at home by 0.1 percent. - Other Items (Excluding Food and Energy): This category saw a 0.1 percent rise in June, down from a 0.2 percent increase in May. Increases were noted in shelter, motor vehicle insurance, household furnishings and operations, medical care, and personal care. Conversely, there were decreases in airline fares, u...

Banks have a major role to play in supporting minority-owned businesses BankThink. American Bankers Newspaper. By William Michael Cunningham June 25, 2024, 10:00 a.m. EDT   The United States' economy is distinctly divided into two economies: the minority economy and the majority economy. This division is supported by empirical evidence highlighting significant economic disparities between minority groups and their white counterparts, particularly during economic downturns.   Minority populations, including Black, Hispanic and Native American communities, consistently face higher unemployment rates , lower income levels, and reduced access to capital . These disparities are further exacerbated during economic recessions. The Federal Reserve indicates that Hispanics, Blacks, Native Americans and other disadvantaged groups experience greater-than average unemployment rates over the economic cycle. For instance, during recessions, the unemployment rate for Black and Hispanic ind...

Influenced by legal developments, the election, macroeconomic shifts, and investment trends, minority owned businesses face a complex year ahead. Legal and Regulatory Environment: The aftermath of the 2023 Fearless Fund lawsuit has stirred significant conversations around diversity, equity, and inclusion (DEI). This case, challenging the support for Black female entrepreneurs, shines a light on systemic discrimination in business funding. Compounding this is Elon Musk's contentious statement on DEI, sparking further debate. A concerning report on Navy Federal, the nation's largest credit union, revealed over half of Black mortgage applicants were rejected, underscoring deep-seated disparities in financial services and systemic biases in lending. 2024 Economic and Market Outlook: The Federal Reserve's economic indicators for 2024 and 2025 signal a cautious yet hopeful scenario: - GDP growth: 1.5% (2024), 1.8% (2025) - Inflation: 2.8% (2024), 2.4% (2025) - Unemployment: Stabl...

According to an article in Black Enterprise Magazine, "William Michael Cunningham,  an economist who runs Washington, D.C.-based Creative Investment Research, says MEOA’s offering could prompt other investors to create new SPACs and venture capital funds to invest in Black companies. 'This is relevant because it may represent a new and significant source of capital that has not previously been available to Black and minority firms. If it works as intended, you could see billions in new startup and operational capital going to Black firms,' he says. He says the offering’s timing was perfect because of the increased attention on Back economic empowerment. That is fueled, he says, by the increased requirement corporations and investors are showing toward their commitment to doing business with Black firms." See: Black Enterprise Magazine. Exclusive: Black-Led SPAC Raises Colossal $126.5 Million, Set To Acquire Black, Minority-Owned Firms.  https://lnkd.in/dyWy6D35 Also s...

"Committed though the government might be too small and minority-owned contractors, from the contractor standpoint making a living is never easy. Now they’ve got the COVID-19 situation. For what the landscape looks like for minority-owned businesses, Federal Drive with Tom Temin turned to Creative Investment Research economist and principal William Michael Cunningham." https://federalnewsnetwork.com/management/2020/05/maybe-sba-wasnt-best-choice-to-deliver-ppp-benefits-to-minority-businesses/

Being a minority small business owner can be particularly challenging due to issues that other business owners don't face, like racial and gender discrimination, having low (or no) collateral and having a low credit scores. These factors definitely make it harder to finance a business. There are, however, resources that can help make financing your business easier, given these constraints. Here are a few: SBA Loans While we have not been impressed with the outcome of their efforts focusing on African American businesses, the Small Business Administration (SBA) offers services and programs you need to know about if you are looking to start or fund a minority business. To begin with, SBA’s 8(a) Business Development program is focused on small businesses that are 51% or more owned and controlled by members of disadvantaged subgroups by ethnicity or race. The program offers a plethora of business support services, including financial assistance, business counseling, and mentorin...

According to Politic365 , "Officials from the Commerce Department briefed members of Congress..to inform them that the Obama Administration plans to close all five regional Offices of the Minority Business Development Agency. According to members at the briefing the reason given was cost savings. The Office of Minority Business Development has a total budget of $30 million dollars. The five regional offices are located in Atlanta, Chicago, Dallas, New York, Los Angeles and San Francisco. The Office of Minority Business Development‘s mission is to promote competitiveness and provide access to capital and contracts to minority businesses. In 1969 Richard Nixon established the Office of Minority Business Enterprise by executive order. During the Carter Administration the name was changed to the Office of Minority Business Development. Present at the meeting with Commerce officials were Congressional Hispanic Caucus Chair Charlie Gonzalez (D-TX), Congressional Asian Pacific American...

MinorityFinance.com is pleased to announce the publication of the Minority and Women-owned Company Small Business Financing Guide and Workbook, 2010 Edition . The Guide and Workbook are designed to provide actionable information minorities and women can use to obtain small business financing. The Guide and Workbook consists of two sections: The Guide provides detailed business financing information of specific relevance to Minority and Women-owned Businesses. The Workbook is an electronic document with blank loan applications, grant forms, business planning and financial reporting templates, IRS Forms and other documents. The Guide and Workbook will be of specific interest to those seeking to finance a new firm and/or start-up. It has special sections on financing a Day Care Center, financing a Beauty/Hair Salon, financing a Music/Film business. Specific sections of the Workbook provide detailed information on: How to complete a Bank Loan Application (completed sample application inclu...

Creative Investment Research, Inc. issued comments for the Small Business Federal Contracting Forum public meeting to be held on Monday, June 28, 2010. The purpose of the meeting is to encourage public comment on small business issues. On April 26, 2010, President Obama established an Interagency Task Force to develop proposals and recommendations for enhancing the use of small businesses in Federal contracting, including businesses owned by women, minorities, socially and economically disadvantaged individuals, and service-disabled veterans of our Armed Forces. The Memorandum establishing the Task Force is available here . Creative Investment has long been familiar with the problems that small and minority businesses encounter when attempting to contract with the federal government. We reviewed our experiences in our comments. In addition, we noted which Federal agencies are doing the best job in their small business outreach strategies. We noted that doing business with the Federal...

Creative Investment Research, Inc. released its listing of the top women and minority owned financial institutions (banks and thrifts). The listing, using 2009 financial, demographic, HMDA and CRA information from a database maintained by Creative Investment Research, was compiled using the firm's proprietary Fully Adjusted Return tm Index. The Fully Adjusted Return tm Index provides a full description of the economic condition and social responsiveness of a financial institution. Asian - Hawaii National Bank, Honolulu, HI. 808-528-7711; Black - Industrial Bank, Washington, DC. 202-722-2040; Hispanic - Interamerican Bank, FSB, Miami, FL. 305-223-1434; Native American - Peoples Bank, Adair, OK. 918-723-5453; Women - Central Bank of Kansas City, Kansas City, MO. 816- 483-1210; See: http://www.minoritybank.com/cirm3.html If you contact any of these institutions, do us a favor....let them know you found them here!!

VHCDC-MBE Capital Connect™ is looking for U.S. based Minority Business Enterprises/Entrepreneurs with innovative, marketable solutions within the Business Products and Services, Consumer Products and Services, E-Commerce, Energy, Entertainment/Media, Internet, Telecommunications, and Technology industries to enter the Top-MBE Business Plan Competition to win a spot to pitch their business opportunity to active angel investors, lenders, and venture capitalists. Pitching sessions will be conducted Friday, September 26th during the 2008 MBE Capital Call. Entries will be evaluated against the same criteria used by active investors to screen potential investment opportunities. Interested parties must register to be considered. Logon to: www.mbecapitalcall.com today to register. James R Taylor, Director VHCDC-MBE Capital Connect™ www.vhcdc.org 757.671.8333 VM jtaylor@vhcdc.org