Economic Trends

Small Business Hiring Sees 

Growth in December

Index Points to Strong Employment Rebound

    CLEVELAND-- (BUSINESS WIRE) -- 1/9/2022 - The CBIZ Small Business Employment Index (“SBEI”) reported a seasonally adjusted increase of 1.05% in December, offering a positive sign on the heels of the hiring decline seen in November. The CBIZ SBEI tracks payroll and hiring trends for over 3,700 companies that have 300 or fewer employees, providing broad insight into small business trends.

    “December is typically a month where we see positive hiring trends due to the holiday season, and this month was especially strong,”CBIZ, Inc. Executive Vice President Philip Noftsinger said. “It’s possible that workforce safety confidence was a growth factor earlier in the month prior to the omicron variant becoming a larger headline later in the month.”

    The ADP and Moody’s employment report indicated growth in hiring among small, medium-sized and large companies. Its December reading showed an overall increase of 807,000 private-sector jobs for the month, an improvement from the November report. Small businesses accounted for 204,000 of those new jobs on a seasonally adjusted, month-over-month basis. The ADP and Moody’s report counts small businesses as companies with 49 or fewer employees, while the CBIZ SBEI uses data from companies with 300 employees or fewer.

    The CBIZ SBEI reported hiring growth in all four regions measured. The West (1.95%) showed solid growth but less than the previous month, following its robust economic rebound from delta variant-related closures in the late summer. The Central (2.88%), Southeast (2.25%) and Northeast (1.80%) regions all showed impressive growth as well, reflecting a strong recovery from November’s negative readings for these regions.

    On an industry level, the most notable increases were seen in Insurance, Non-profit, Financial Services, Healthcare, Construction, and Retail. Education and Agriculture experienced hiring declines.

    “The December reading points to a positive indicator that the labor shortage is waning,” Noftsinger said. “The continued increase in COVID-19 cases could cause a slowdown in the momentum we’re seeing, but with the adoption of booster vaccines and the increased availability of treatments to mitigate severe symptoms, employees are likely to feel more confident returning to work.”

    To view an infographic with data from the employment index, see CBIZ.

    Additional takeaways from the December SBEI include:

• December’s snapshot: 28% of companies in the index expanded employment, 53% made no change to their headcounts and 19% reduced staffing.
• Industries at a glance: Hiring gains were seen in Insurance, Non-profit, Financial Services, Healthcare, Construction, and Retail. Meanwhile, declines were reported in Education and Agriculture.
  
• Geographical hiring: The Central (2.88%), Southeast (2.25%), West (1.95%) and Northeast (1.80%) regions all experienced hiring increases.

    What’s next? Small businesses are growing their workforces despite the labor shortage and pandemic-related economic volatility. In 2022, this momentum should continue as other factors like supply chain issues and stagflation abate. 

    CBIZ is one of the largest accounting and insurance brokerage providers in the U.S. For more information, visit www.cbiz.com. 

 

Economic Analysis

Survey: Gen Z Purchasers 

Value Sustainability More 

Than Older Generations

    PITTSBURGH-- (BUSINESS WIRE) -- 11/26/2021 -- As sustainability and climate change dominate the headlines globally, new consumer research conducted by First Insight and the Baker Retailing Center at the Wharton School of the University of Pennsylvania shows the power that Gen Z consumers have over older generations to influence purchasing decisions around sustainability. Fully three-quarters of Gen Z consumers said that sustainability was more important to them than the brand name when making purchase decisions. As a result of Gen Z’s influence over their Gen X parents on this issue, Gen X consumers’ preference to shop sustainable brands increased by 24 percent and their willingness to pay more for sustainable products increased by 42 percent since 2019.

    Gen Z, the demographic cohort born after 1997, has historically been the most vocal about the health of the planet. The survey, conducted by First Insight and the Baker Retailing Center at the Wharton School of the University of Pennsylvania, found that Gen Z leads the way in sustainability. In fact, consumers across all generations—from Baby Boomers to Gen Z—are now willing to spend more for sustainable products. Just two years ago, only 58 percent of consumers across all generations were willing to spend more for sustainable options. Today, nearly 90 percent of Gen X consumers said that they would be willing to spend 10 percent extra or more for sustainable products, compared to just over 34 percent two years ago.

   “Our research points to a seismic shift in sentiment around sustainability purchasing decisions, with significant increases in just two years. When the previous study was fielded in 2019, older generations were not as sustainability-conscious as they are today. The global pandemic caused many to rethink their consumption and its impact on the health of the planet, yet Gen Z have been consistent in remaining true to their sustainability values while also educating and influencing the generations that came before them,” First Insight CEO Greg Petro said.

 
    Download the report to see all the key findings from the study here.

Additional Key Findings:

    Today, the majority of respondents across every generation expect retailers and brands to be more sustainable. The survey found, however, that there is some disconnect across the generations about what sustainability actually means. Nearly half of the Boomers (44 percent), Gen X (48 percent), and Millennials (46 percent) agree that sustainability means “products made from recycled, sustainable and natural harvested fibers and materials.” Meanwhile, nearly half of the Gen Z (48 percent) respondents believe that sustainability means sustainable manufacturing. One thing most could agree on is that packaging should be sustainable. Across generations, 73 percent combined feel that sustainable packaging is very or somewhat important today, compared to only 58 percent in 2019.

    The survey found that values-based purchase decisions—whether they are personal, social, or environmental—are more likely to be made by Gen X (76 percent), Millennials (77 percent), and Gen Z (75 percent), and within those groups, men (77 percent) are more likely than women (67 percent) to make values-driven purchases.

Methodology:

    First Insight’s findings are based on the results of a U.S. consumer study of a targeted sample of more than 1,000 respondents, balanced by gender, geography, and generation, and was fielded between July 1, 2021, and July 10, 2021. The study was completed through proprietary sample sources among panels who participate in online surveys. Further details on the findings are available upon request.

Economic Analysis

House Price Index Shows Decline 

In Affordability for 

Third Month in a Row

    SANTA ANA, Calif. - (BUSINESS WIRE) - 8/12/2021 - First American Financial Corporation (NYSE: FAF), a leading global provider of title insurance, settlement services and risk solutions for real estate transactions, released the May 2021 First American Real House Price Index (RHPI) on July 27. The RHPI measures the price changes of single-family properties throughout the U.S. adjusted for the impact of income and interest rate changes on consumer house-buying power over time at national, state and metropolitan area levels. Because the RHPI adjusts for house-buying power, it also serves as a measure of housing affordability.

Chief Economist Analysis: Record Nominal House Price Appreciation Outpaces House-Buying Power Growth in May

    “Housing affordability declined on a year-over-year basis for the third month in a row in May, following a two-year streak of rising affordability,” said Mark Fleming, chief economist at First American. “The decline in May occurred even as two of the three key drivers of the Real House Price Index (RHPI), household income and mortgage rates, swung in favor of greater affordability relative to one year ago.

    “House-buying power increased by 8 percent in May compared with a year ago, propelled by lower mortgage rates and higher household income. The affordability gains from house-buying power, however, were offset by the third component of the RHPI, nominal house price appreciation, which reached a record 18 percent in May, surpassing the previous peak from 2005,” said Fleming. “As always, real estate is local and national affordability trends are not necessarily reflected in local trends, as house-buying power and nominal house price gains vary greatly from city to city.”

Affordability Declined in 49 of the 50 Major Markets

    “The drop in affordability was broadly felt as affordability declined year over year in 49 of the 50 markets we track,” said Fleming. “The five markets with the greatest year-over-year decline in affordability were:

1. Phoenix (-22.7 percent)
2. Seattle (-20.1 percent)
3. Kansas City, Mo. (-19.6 percent)
4. Tampa, Fla. (-17.8 percent)
5. Las Vegas (-17.2 percent)
   

    “Mortgage rates are generally the same across the country, so a decline in mortgage rates boosts affordability equally in each market,” said Fleming. “Household income growth and nominal house prices, on the other hand, differ from market to market, so the affordability dynamic varies as well.

    “In May, Phoenix had the greatest year-over-year decrease in affordability. While annual income growth was steady at 1.9 percent, Phoenix experienced the biggest annual increase in nominal house prices of any major market – 29.3 percent. The steep increase in nominal house prices overshadowed any affordability gains from increased house-buying power,” said Fleming. “A similar dynamic played out in Tampa as year-over-year nominal house price appreciation of 25.6 percent outpaced house-buying power.

    “In Seattle and Las Vegas, house-buying power ticked up as the positive impact of falling mortgage rates offset a decline in household incomes. However, like Phoenix and Tampa, nominal house price growth in Seattle (20.7 percent) and Las Vegas (19.9 percent) overshadowed the house-buying power gains,” said Fleming. “Kansas City was the only one of the five markets where house-buying power declined, combining with faster house price appreciation to drive a decline in affordability.”

Where Are Nominal House Prices Headed?

    “Declining affordability may cause potential home buyers on the margin to be priced out, prompting fewer or less intense bidding wars and causing house price appreciation to moderate. The increase in housing inventory may likewise ease pressure on nominal house price growth, though the increase remains small relative to historic levels and the broader housing supply shortage is likely to take years to reverse,” said Fleming. “Affordability trends in the coming months will depend on the supply and demand dynamics behind nominal house price appreciation – dynamics which will play out differently in each market.”

May 2021 Real House Price Index Highlights

• Real house prices increased 0.7 percent between April 2021 and May 2021.
• Real house prices increased 8.9 percent between May 2020 and May 2021.
• Consumer house-buying power, how much one can buy based on changes in income and interest rates, increased 1.4 percent between April 2021 and May 2021, and increased 8.4 percent year over year.
• Median household income has increased 4.7 percent since May 2020 and 78.0 percent since January 2000.
• Real house prices are 19.9 percent less expensive than in January 2000.
• While unadjusted house prices are now 30.1 percent above the housing boom peak in 2006, real, house-buying power-adjusted house prices remain 43.8 percent below their 2006 housing boom peak.

May 2021 Real House Price State Highlights

• The five states with the greatest year-over-year increase in the RHPI are: Arizona (+19.4 percent), Vermont (+17.0 percent), Washington (+16.6 percent), Nevada (+16.3 percent), and Connecticut (+15.4 percent).
• There were no states with a year-over-year decrease in the RHPI.

May 2021 Real House Price Local Market Highlights

• Among the Core Based Statistical Areas (CBSAs) tracked by First American, the five markets with the greatest year-over-year increase in the RHPI are: Phoenix (+22.7 percent), Seattle (+20.1 percent), Kansas City, Mo. (+19.6 percent), Tampa, Fla. (+17.8 percent), and Las Vegas (+17.2 percent).
• Among the Core Based Statistical Areas (CBSAs) tracked by First American, the only market with a year-over-year decrease in the RHPI is San Francisco (-0.1 percent).

Next Release

    The next release of the First American Real House Price Index will take place the week of August 30, 2021 for June 2021 data.

Sources

First American Data & Analytics
Freddie Mac
Census Bureau

Methodology

    The methodology statement for the First American Real House Price Index is available at http://www.firstam.com/economics/real-house-price-index.
 

Note: Original release date, July 27, 2021.

Cyber Security

Report: Healthcare, Manufacturing

Top Targets for Cyber Attacks

    NEW YORK -- (BUSINESS WIRE) -- July 5, 2021 - Avanan, a leader in Cloud Email and Collaboration Security, announced on June 30 the release of the company's 1H 2021 Global Phish Cyber Attack Report, which analyzes today’s threat landscape, phishing vectors, and industry-based attacks, exposing healthcare and manufacturing as two of the top industries being targeted by hackers in the first half of the year.

    “With hospitals around the world being hit with ransomware attacks and manufacturers experiencing supply chain disruption due to cyber-attacks, the Avanan research shows that hackers are using one of the most basic tactics to get in ‒ phishing attacks,” said Gil Friedrich, CEO and Co-Founder of Avanan.

    According to Avanan’s security research and analysis, the most attacked industries are IT, healthcare, and manufacturing. IT saw over 9,000 phishing emails in a one-month span, out of an average of 376,914 total emails; healthcare saw over 6,000 phishing emails out of an average of 451,792 total emails; and manufacturing saw just under 6,000 phishing emails out of an average of 331,184 total emails.

    These industries are the most targeted because they hold incredibly valuable data from health records to social security numbers, combined with the fact that healthcare and manufacturing tend to use outdated tech and often have non-technical board of directors. In healthcare, in particular, the industry is largely unprepared. Though every industry gets attacked, the ones that hold the most data are the most at risk.

    For this report, Avanan security researchers analyzed over 905 million emails spanning a six-month period. Since Avanan works as a layer of security behind Microsoft’s EOP, ATP/Defender, Google Workspace, or any SEGs, this analysis only looks at the emails these other layers did not quarantine. The report reflects an analysis of the most sophisticated and evasive attacks in use today.

    Key Findings:

• Because threats have gotten so advanced, AI is required to stop the majority of attacks missed by legacy solutions. Without the use of sophisticated AI, 51% of attacks would be missed and reach end-users.
• Impersonation and credential harvesting attacks remain top phishing vectors. Credential harvesting, 54% of all phishing attacks, has risen by nearly 15% when compared to 2019; 20.7% of all phishing attacks are Business Email Compromise (BEC); and only 2.2% of phishing attacks are extortion.
• Hackers are starting to target lower-hanging fruit rather than C-level executives. Now, 51.9% of all impersonation emails attempted to impersonate a non-executive in the organization. In fact, non-executives are targeted 77% more often.
• Misconfiguration is playing a rising role in phishing. Over 8% of phishing emails ended up in the user’s inbox simply because of an allow or block list misconfiguration, a 5% increase from last year, and 15.4% of email attacks are on an Allow List.
• The most commonly used tactic is using non-standard characters and limited sender reputation. Non-standard characters are used in 50.6% of phishing links and 84.3% of phishing emails do not have a significant historical reputation with the victim.
  

    Avanan anticipates that cyberattacks will continue to explode with healthcare and education being hit hardest, predicting that attacks on the education sector will surge over the next six months with massive increases when school returns in the fall. In addition, Avanan predicts COVID related phishing emails will decrease, while office place related phishing emails will increase. As workers around the globe return to the office, there will be a spike in phishing attacks leveraging services like fax, scanners, copiers, targeting the things used in office life that sat dormant for the last year and a half.

    For more information and to download the report, please visit: https://www.avanan.com/resources/white-papers/1h-cyber-attack-report.

 

U.S. Economy

Major Economic Indictors

     Most Recent U.S. Bureau of Labor Statistics Data

The CPI. Bureau of Labor Statistics graph.

    (RP News) - 12/24/2020 - The U.S. Bureau of Labor Statistics' latest summary of major economic indicators for the United States, as of Dec. 23, 2020, shows a slight bump in prices for urban consumers, as well as a drop in the unemployment rate to 6.7 percent. “These improvements reflect the continued resumption of economic activity that had been curtailed due to COVID-19, though the pace of improvement has moderated in recent months,” the bureau states. 

    The bureau's most recent update and summary:

Consumer Price Index

    In November, the Consumer Price Index for All Urban Consumers rose 0.2 percent on a seasonally adjusted basis; rising 1.2 percent over the last 12 months, not seasonally adjusted. The index for all items less food and energy rose 0.2 percent in November (SA); up 1.6 percent over the year (NSA).

Employment Cost Index

    Compensation costs rose 0.5 percent for civilian workers, seasonally adjusted, from June 2020 to September 2020. Over the year, compensation rose 2.4 percent, with wages and salaries rising 2.5 percent and benefit costs increasing 2.3 percent. See: cost index

Employment Situation

    Total nonfarm payroll employment rose by 245,000 in November, and the unemployment rate edged down to 6.7 percent. These improvements reflect the continued resumption of economic activity that had been curtailed due to COVID-19, though the pace of improvement has moderated in recent months. See: employment situation.

Producer Price Index

    The Producer Price Index for final demand advanced 0.1 percent in November, as prices for final demand goods increased 0.4 percent, and the index for final demand services was unchanged. The final demand index increased 0.8 percent for the 12 months ended in November.

Productivity and Costs

    Productivity increased 4.6 percent in the nonfarm business sector in the third quarter of 2020; unit labor costs decreased 6.6 percent (seasonally adjusted annual rates). In manufacturing, productivity increased 19.9 percent and unit labor costs decreased 12.1 percent. See: productivity and costs

Real Earnings

    Real average hourly earnings increased 0.1 percent over the month in November, seasonally adjusted. Average hourly earnings increased 0.3 percent and CPI-U increased 0.2 percent. Real average weekly earnings increased 0.1 percent over the month.

U.S. Import and Export Price Indexes

    U.S. import prices rose 0.1 percent in November following a 0.1-percent decrease in October. Prices for exports advanced 0.6 percent in November, after rising 0.2 percent the previous month. Over the past year, import prices declined 1.0 percent and export prices fell 1.1 percent. See: indexes

Unemployment rate, 2000-2020. BLS graph

Economic Trends

Report: New Risks, Opportunities

Emerging Because of COVID-19

Consumer Behavior Will Shift $3 Trillion in Economic Value

   

    NEW YORK - (BUSINESS WIRE) - 11/23/2020 - With the pandemic driving people to spend more time at home, avoid air travel, and change their spending habits, businesses can expect to see a shift of more than $3 trillion in economic value, according to Accenture (NYSE: ACN).

Graphic courtesy of Business Wire

   The report, titled The Big ValueShift, quantifies the broad impact of long-term changing consumer behaviors and provides actionable insights for companies to build strategies to thrive in the face of disruption. 

   Through a proprietary macroeconomic model that incorporates data from 38,000 companies across 25 industries, as well as household spending data for 15 countries that account for approximately 80% of global GDP, Accenture conservatively found:

• More than $2 trillion of annual value may shift away from industries such as restaurants, traditional retail, and commercial real estate as consumers pass more of their leisure time at home.
• Changes in spending may cause a net decline of up to $687 billion in annual value across consumer-facing industries.
• If current declines in air travel persist into a longer-term shift, up to $318 billion of annual value will flow to different industries and ecosystems.
• “Ripple effects of today’s changing consumer behaviors are causing waves that will reshape industries and their ecosystems. Companies must be ready — with responsive business models, technology-enabled operating models that are agile, and a growth mindset rooted in data and advanced analytics — to uncover new value and better meet customer demands as this wave of change approaches their industry,” said Kathleen O’Reilly, global lead of Accenture Strategy.

   According to the latest Accenture Consumer Pulse Survey, nearly three-quarters (73%) of respondents expect to feel most comfortable spending their free time at home over the next six months. This shift is impacting the traditional retail and leisure industries with value transferring to companies that offer ecommerce and digital-entertainment options.

   “The crisis has forced an uncomfortable reckoning for many brands — but, handled wisely, this will result in new ways of doing business that deliver better experiences for consumers and growth for organizations,” said Oliver Wright, global lead of Accenture’s Consumer Goods & Services industry group. “Before Covid-19, in-store shopping was, for most companies, the only ‘game in town’ with ecommerce and digital marketing an afterthought. The companies that fully integrate enjoyable and efficient digital and physical experiences that deliver faster, more convenient services will be the winners in the future.”

   The highly suppressed demand for air travel has had a profound impact on the travel ecosystem from airlines and airports to aircraft manufacturers, and even further downstream to hotel chains, energy, and resources companies. Data suggests that business travel will be one of the last segments to experience a sustained recovery. As consumers will still have vacation time, value is likely to migrate to sectors like domestic tourism, digital entertainment, and outdoor recreation.

   “Fundamental changes in behavior, including heavily reduced air travel and consumer discomfort in public spaces, creates opportunity in other areas. Companies need to innovate to drive new revenue streams and look at their ecosystem partnerships to offer value-added services that cater to new ways of working and the health-conscious consumer. For example, the hospitality sector can leverage existing assets to provide hotel rooms for day rates so people can work away from home, but still in a safe space. Critically, these efforts could also become a permanent and profitable avenue for growth in the post-pandemic era,” Accenture Travel Industry group global lead Emily Weiss said.

   The Big Value Shift is the first in a series of Macroeconomic Insights that looks at major economic and sustainability trends arising from the COVID-19 crisis and offers guidance for business leaders as they strategize and navigate their companies through unchartered business territory.

Economic Outlook

NRF Chief Economist Says Recovery 

‘Being Tested Daily’ With COVID Rise

   WASHINGTON - (BUSINESS WIRE) - 8/6/2020 - Despite broad indications that the economy has begun to recover as businesses reopen from the coronavirus pandemic, conflicting data makes it difficult to say how steadily the comeback will continue, National Retail Federation Chief Economist Jack Kleinhenz said on Aug. 3.

      “Optimism about the economy

and retail spending is being tested daily with the spread of the coronavirus,” Kleinhenz said. “Big questions are looming, and we are all grappling to discern what incoming data is telling us about the health of the economy and consumers. Depending on the data selected, the answers are not entirely clear.”
   Kleinhenz’s remarks came in the August issue of NRF’s Monthly Economic Review, which said monthly indicators showed the economy improving in May and June but that more frequent data showed the pace of recovery flattening by mid-July. The chart accompanying this story is courtesy of statista, with Creative Commons License here.
   “A key question is whether the pace of growth and momentum will carry forward over the next few months,” Kleinhenz said. “Based on quarterly and monthly data, the U.S. economic recovery continues despite elevated COVID-19 cases. But in examining weekly data, the pace of improvement appears to be slowing. Could it be that we are at or heading back to the same spot we were at two months ago?”
Economists traditionally look at monthly and quarterly numbers to gauge the status of businesses and consumers. But the release of that data lags weeks behind when it is collected. And with the situation changing rapidly since the outbreak of the coronavirus early this year, more frequent information has been needed to keep up. In response, the Federal Reserve and others have begun tracking some indicators as often as weekly.
   Consumer spending was up 8.2 percent in May, for example, ending two consecutive months of decline, and up another 5.6 percent in June. Meanwhile, retail spending as calculated by NRF – excluding automobile dealers, gasoline stations and restaurants to focus on core retail – was up 4.9 percent in June. Monthly numbers for July are not available yet. But the Federal Reserve Bank of New York’s Weekly Economic Index – a composite of indicators – worsened from -6.65 percent on July 18 to -7.24 percent as of July 25, with officials citing a decrease in retail sales. The weekly Mobility and Engagement Index from the Federal Reserve Bank of Dallas also showed the economy leveling off in mid-July.
   In the labor market, 4.8 million jobs were added in June as the unemployment rate ticked down to 11.1 percent from 13 percent in May. The monthly jobs data, however, was collected before the recent resurgence in COVID-19 cases. By contrast, weekly data showed that 1.4 million initial unemployment claims were filed the week of July 18. That was a rise of about 100,000 from the week before and reversed a steady decline in claims since a peak of 6.9 million the last week of March.
   While many of the weekly reports initially agreed with the monthly data and “showed the economy on a good start down the recovery runway, they now suggest that the economy is moving sideways,” Kleinhenz said. “Time will tell, but the bottom line is that the economy is far from being out of the woods. The question is whether it is re-entering the woods.”
   With many economists saying the timeline of the recovery will be determined by the efforts to control the virus, the Federal Reserve Bank of Cleveland conducted a survey in early July that found 89.9 percent of those polled wear a mask for activities such as shopping in a grocery store. The bank said it conducted the survey because masks “have the potential to help reduce the spread of COVID-19 without greatly disrupting economic activity.”
  Published Aug. 6 with update/graph

Cybercrime

Report: Pandemic Stirs

63% Spike In Cyber Attacks

Security Efforts, Priorities Lag Behind

By Steve Rensberry
RP News

-------------------

ISSA graphic. One survey response.

   EDWARDSVILLE, Ill. - (RP NEWS) - 8/1/2020 - A newly released report from the Information Systems Security Association (ISSA) and Enterprise Strategy Group (ESG) says the COVID-19 pandemic has presented a “once-in-a-lifetime opportunity,” for cybercriminals, and cites the results of a survey showing a 63 percent increase in cyberattacks since the crisis began.
   The survey was conducted by the two groups, culminating in a report representing input from some 364 cybersecurity and IT professionals.
   “COVID-19 had a wide-ranging impact on individuals on the security staff. With 84 percent of cybersecurity professionals working exclusively from home during the pandemic and almost two-thirds believing that their organizations will be more flexible with work-at-home policies moving forward, COVID-19 has personally impacted cybersecurity professionals in their jobs and in their lives,” Senior Principal Analyst and ESG Fellow Jon Oltsik stated in the July 30, 2020 release. “This is in addition to the ongoing impact on organizations and security teams from the yearly worsening problem of the cybersecurity skills shortage,” Jon Oltsik, Senior Principal Analyst and ESG Fellow. 
   An associated report, The Impact of the COVID 19 Pandemic on Cybersecurity, is available here.
   Highlights of the report, as noted in the release:

•    Organizations were only fairly prepared for the global pandemic. Thirty-nine percent of respondents claim that they were very prepared to secure WFH devices and applications while 34 percent were prepared. Twenty-seven percent were underprepared. Therefore, the pandemic drove rapid changes, changing workloads, and new priorities.
•    COVID-19 and WFH are driving improved collaboration. Slightly more than one-third of organizations have experienced significant improvement in coordination between business, IT, and security executives as a result of COVID-19 issues and 38 percent have seen marginal relationship improvements.
•    COVID-19/WFH have had an impact on cybersecurity professionals and their organizations alike. The research indicates that COVID-19 has forced cybersecurity professionals to change their priorities/activities, increased their workloads, increased the number of meetings they have had to attend, and increased the stress levels associated with their jobs. Meanwhile 48 percent say that WFH has impacted the security team’s ability to support new business applications/initiatives.
•    Most organizations don’t believe the pandemic will increase 2020 cybersecurity spending. Only 20 percent believe that COVID-19 security requirements will lead to an increase in security spending in 2020, while 25 percent think their organizations will be forced to decrease security spending this year. Where they expect their spending to increase, at least half pointed to priority areas being identity and access management, endpoint security, web and email security, and data security.
•    COVID-19 may impact cybersecurity priorities. ESG/ISSA believes that while it is noteworthy that 30% of the cybersecurity professionals participating in this project say that cybersecurity will be a higher priority, 70% report that they don’t know or don’t believe that this crisis will lead to cybersecurity becoming a higher priority.

   ISSA International Board President Candy Alexander expressed surprise that cybersecurity has not become more of a priority after all that has happened.
   “While it’s promising to see that the majority of organizations were able to handle the COVID-19 pandemic fairly well, it is surprising that we are not seeing an increase in cybersecurity spending or prioritization following this event,” Alexander said. “If anything this should serve as a wakeup call that cybersecurity is what enables businesses to remain open and operational. Organizations prioritizing cybersecurity as a result of the pandemic will likely emerge as leaders in the next wave of cybersecurity process innovation and best practices.”
   The increase in cyber attacks and cybercrime has been noted by several news outlets, over the past couple of week especially.
   “Large swaths of the global economy have shut down during the global COVID-10 pandemic, but cybercriminals haven't been taking any time off. On the contrary, cyberattacks actually spiked during the first half of 2020 with attackers finding new ways to exploit the conditions brought on by widespread lockdowns,” writes Freelance Journalist Cynthia Harvey in a June 24, 2020 article for Information Week, available here: 10 Cyberattacks on the Rise During the Pandemic.
   Harvey cites an FBI spokesperson as saying the Internet Crime Complaint Center received close to the same number of complaints as of May 28 this year that they had for all of 2019.

Reference:
ESG-ISSA Research Report - Covid-19-July-2020
Resource Guide for Cybersecurity During Pandemic

Skadden Arps Under Fire

   Group Calls on Governor

to Cut Ties With Skadden Arps

 WILMINGTON, Del. - (BUSINESS WIRE) - 7/15/2020 - Advocacy organization Citizens for a Pro-Business Delaware called on Governor John Carney today to sever all government contracts with the beleaguered law firm of Skadden Arps, a firm conflicted with numerous ethical challenges, including its involvement in the Ukranian voter suppression scandal, and a staggering lack of diversity among its partner and associate classes.
 

Skadden Arps has been awarded millions of dollars in contracts and no-bid legal fees from Delaware’s Government and Court of Chancery while making no meaningful improvements on supporting black lawyers or partners.
   In June, Reverend Al Sharpton called on Skadden, Arps to increase inclusion and support of black lawyers and partners but the firm ignored the request. Skadden Arps lack of diversity is striking; over the past three years, Skadden Arps has named 38 new partners, only two of whom are black and the firm’s Wilmington office has zero black partners and only one black associate.
   As prominent social justice organizations across the country call for governments to acknowledge systemic racism and support black-owned businesses and increase the representation of people of color, Governor John Carney continues to appoint from and give contracts to Skadden Arps regardless of their nascent diversity numbers. Recently, Delaware’s Chancery Court, led by Chancellor Andre Bouchard, was again noted for its questionable connections to Skadden Arps, his former place of employment.
   “Skadden Arps received over 15 million dollars from the TransPerfect case alone when Chancellor Bouchard appointed his former colleagues as the custodian. Governor Carney and the state of Delaware cannot continue filling the pockets of these white lawyers with no bid legal fees and contracts that should go to firms with real diversity numbers that support black lawyers and partners. If Skadden Arps refuses to make meaningful improvements on diversity, it is essential that Governor Carney exerts his power and stands up for the racial, ethnic, gender, and socioeconomic diversity of Delaware’s communities. We must demand better from our leaders if we want better for our communities.” CPBD Campaign Manager Chris Coffey said.

Covid-19 Impact

Retail Group: Rise in Covid-19

Cases Cause for Concern

By Steve Rensberry 

srensberry@rensberrypublishing.com

------------------------------------------------- 

   EDWARDSVILLE, IL - July 4, 2020 -- National Retail Federation (NRF) Chief Economist Jack Kleinhenz cited a number of positive economic signs this past month, even as the country continues to battle the Covid-19 health emergency, but expressed concerns about a prolonged recovery given the rising number of cases in the country.
    “Before we prematurely celebrate the return of the consumer, the wave of new coronavirus outbreaks spreading throughout the country are a major threat to the recovery,” Kleinhenz stated in a July 1 news release. “These outbreaks are alarming, and if they accelerate will certainly sway consumer and business confidence, taking a toll on output and employment and prolonging the time it takes to achieve a true economic recovery.”
  Kleinhenz's concerns were published in the July edition of the NRF's Monthly Economic Review. Among other things he noted:

• The U.S. economy officially entered a recession in February according to the National Bureau of Economic Research, a declaration that has usually taken from six to 18 months.
• The stock market just ended one of the best quarters it has seen since 1998, recovering almost all of the losses that it saw in the first quarter.
• Payrolls were up by 2.5 million jobs in May.
• Consumer spending was up that same month by 8.1 percent, and retail sales by about 18 percent.
• Despite the economic high points, all are below last year's levels.

“Will this recession be briefer than earlier recessions?” Kleinhenz stated. “No one has a crystal ball. And just as it can take months to be certain a recession has begun, it can take time to declare when one is over. While it would be unusual for a recession to last less than six months, it is possible that the current one could have already ended with May’s rebound. The good news is that the recession may have ended as fast as it started. The bad news is there is plenty of uncertainty on the shape of the reopening of the economy, and the recovery will be slow even if we are no longer in recessionary territory.”
   The CBIZ Small Business Employment Index (SBEI) meanwhile, showed June business hiring was “strong,” all things considered, though we're not there yet.
   A June 2 news release shared a word of cautious optimism from CBIZ Executive President Philip Noftsinger: “The June data displays the first real signs of hiring growth since the COVID-19 pandemic prompted nationwide business closures and pullbacks in March. There is a long runway for recovery, but the June data shows positive momentum. Notably, June 2020, which falls on the CBIZ SBEI's 11th year anniversary, denotes the highest reading for the index history for June.”

Other key points:

• ADP and Moody's employment report data shows private-sector employment up by 2.37 million from the previous month (seasonally adjusted)
• Small business employment was up 937,000 jobs.
• With the exception of the information industry sector, “positive hiring trends” were seen in almost every industry.
• Relatively half of the nation's small businesses, 51.4 percent, held steady with respect to employment; roughly one-third, 30.1 percent, showed gains; and the remainder, 18.5 percent, had lower employment levels.These positive trends, however, are likely to see lowered momentum in the coming weeks or months, according to the June report, with rises Covid-19 cases in certain states, forcing further restrictions on business operations.

“Before we prematurely celebrate the return of the consumer, the wave of new coronavirus outbreaks spreading throughout the country are a major threat to the recovery,” the NRF stated. “These outbreaks are alarming, and if they accelerate will certainly sway consumer and business confidence, taking a toll on output and employment and prolonging the time it takes to achieve a true economic recovery.”

Further Reference:

July Edition of NRF Monthly Economic Review 

CBIZ Small Business Employment Index (June)

U.S. Small Businesses See Employment Gain

   MOUNTAIN VIEW, Calif. - (BUSINESS WIRE) - 10/2/2014 - Intuit Inc. (Nasdaq:INTU) issued its monthly Small Business Employment and Revenue Indexes on Oct. 1. Here are topline results from each of the reports:
   Small businesses added 10,000 new jobs in September, making for more than 715,000 jobs added since March 2010.     Hourly small business employees saw a 0.1 percent decrease in monthly compensation, with average monthly pay reaching equivalent of $2,753, down $3 from August.
    Hourly employees worked an average of 108.3 hours in September, down approximately 24 minutes or 0.4 percent from August’s revised figure.
   Findings come from the monthly Intuit Small Business Employment and Revenue Indexes and are based on data from Intuit Online Payroll and QuickBooks Online Payroll, covering the period from Aug. 24 – Sept 23.
   Revenues per small business grew by 0.3 percent in August, roughly 3.1 percent when annualized. Real estate revenues have grown steadily over the past five months, reflecting an increase in home sales. This index is based on data from QuickBooks Online, covering the period from Aug. 1 – 31.
    “Small business coped with additional demand in August by having its existing work force work more. In September, small businesses hired additional people and paid them more, but asked them to work less. In sum, this makes for two months of mild gains in the small business labor market,” said Susan Woodward, the economist who works with Intuit to create the Small Business Employment and Revenue Indexes. “Small business added 10,000 jobs this month after a flat previous month. We are continuing to see signs of a warming labor market. “Despite last month’s flat employment for small business, there are other signs of further employment recovery. Hours worked were up sharply in August, but down in September; compensation was up in August due to more hours being worked, while the hourly wage remained flat. That gain was only partially lost this month, and the percent of workers working full-time was sharply up last month and reversed this month. In both months the hiring rate was up.”   Geographically, all states tracked individually by the Intuit saw hours worked decline, with the exception of Nebraska. The northern prairie states, around the Great Lakes, and those in New England saw employment declines, with Michigan and Idaho seeing the biggest declines. Utah had the biggest gain.
   The real estate rental and leasing industry saw the biggest rise in revenue among the industries tracked, posting a 0.7 percent increase. The accommodation industry posted the only decrease in revenue per business, with a decline of 0.02 percent for the month.
    “The two industries that had the biggest expansion in revenues per business recently are the two that experienced the biggest hit during the recession: real estate services and construction,” Woodward said. “Real estate services revenues rose 0.7 percent in August; this is an annual rate of 8.2 percent. These figures are seasonally adjusted, so this is not just late-summer home buying.”

Survey: Small Businesses See Economic Rebound

   (Business Wire) - 8/14/2014 - More small business owners think we are in an economic rebound and are indicating a slight uptick in business activity since the April survey, but are more conservative in adding new products and services, according to the most recent Business Confidence Survey released by Insperity, Inc. (NYSE:NSP), a leading provider of human resources and business performance solutions for America’s best businesses. Slightly more than 41 percent now plan to add employees compared to 39 percent in April and 50 percent in January; 54 percent are maintaining current staffing levels versus 57 percent last quarter and 47 percent in January; and nearly 5 percent are planning layoffs, compared to 4 percent in April.
    Insperity also announced compensation metrics from its base of 5,300 small and medium-sized Workforce Optimization clients. Average compensation for the second quarter of 2014 increased 1.6 percent over the second quarter of 2013, while bonuses were down 3.2 percent compared to the 2013 period. Average commissions received by worksite employees reflected a decrease of 2.0 percent versus a 6.2 percent increase in the second quarter of 2013. Overtime pay was 10.6 percent of regular pay, above the 10 percent level that generally indicates a need for additional employees, and up from 9.4 percent in the second quarter of 2013.
    In the survey, 79 percent of respondents expect to meet or exceed the 2014 performance objectives they set in January, the same as in April but down from 92 percent in January; 21 percent expect to do worse in 2014, again matching the last survey but up sharply from 8 percent in January. Concerning the timing of an economic rebound, nearly 42 percent think one is currently in process versus 33 percent in April; 22 percent expect a rebound in the fourth quarter of 2014 or later, and 36 percent are unsure versus 44 percent in April.
    Concerning their current profit-generating activities, 71 percent list selling new accounts and 66 percent cite increased service to existing clients, nearly the same as last quarter for each. This was followed by 46 percent who indicate adding new services or products, and 29 percent list investing in new improvements, both of which were down from April.
    “Consensus for an economic rebound is building and overtime pay is now more than 10 percent. This would normally indicate a need for additional workers, but our latest survey reveals that business owners have not become aggressive in acting on that information,” said Paul J. Sarvadi, Insperity chairman and chief executive officer. “Small business may be awaiting further leading confirmation such as an increase in average commissions, which is remaining relatively low.”
    The list of short-term concerns shifted somewhat, with hiring the right people now listed by 50 percent of respondents, while the economy dropped to second at 48 percent. Rising health care costs was third at 47 percent, while controlling overall operational costs moved into fourth place at 44 percent, displacing government health care reform. Government expansion again topped the list of long-term concerns at 57 percent; potential tax increases came in at 51 percent; the federal deficit at 50 percent; and the economy at 42 percent.
    When asked about their pipelines for new business through 2014, 56 percent of survey respondents expected sales to increase, down from 60 percent in April and 66 percent in January; 33 percent anticipate no change versus 28 percent last quarter; 4 percent predict decreasing sales and 7 percent are unsure.
    The survey results show that 28 percent plan to increase employee compensation, down from 29 percent in April and 46 percent in January; 62 percent plan to maintain compensation at current levels, up from 60 percent last quarter and 43 percent in January; 1 percent again expect decreases; and 9 percent are unsure.
    Insperity conducted the survey July 8 – 10, 2014, of chief executive officers, chief financial officers and other executives in a variety of industries from its base of approximately 5,300 Workforce Optimization clients throughout the United States. The overall sampling error of the national survey is +/- 4.8 percent at the 95 percent confidence level.

Three Businessmen Indicted On Fraud Charges

    ST. LOUIS, MO — 1/19/2014 - Three St. Louis-area businessmen recently surrendered to authorities on two separate indictments alleging bank fraud against Excel Bank, which failed in 2012 after receiving $4,000,000 in capital from the Treasury Department through the Troubled Asset Relief Program (TARP).
   According to the indictments, William Glasgow owned dozens of rental properties as part of his real estate business, Glasgow Realty, and did business with Excel Bank, the holding company of which was Investors Financial Corporation of Pettis County, Missouri. The indictment states that Glasgow had two loans on his rental properties, which he received by falsifying documentation.
   In a separate unrelated indictment, James Crews and Michael Hilbert are alleged to have engaged in the real estate business, doing business through various entities including Crews Corporation, Hillcrew Properties, Merz Properties, Eagle Group, and Marathon RE. They owned dozens of rental properties in the St. Louis area and are alleged to have defrauded Excel Bank by submitting numerous draw requests for hundreds of thousands of dollars in escrow funds set aside for improvements to those properties.
   William Glasgow, Town & Country, Missouri, was indicted by a federal grand jury on two felony counts of bank fraud. In a separate unrelated indictment, James Crews, Wentzville, Missouri; and Michael Hilbert, St. Charles, Missouri, were indicted the same day on two felony counts each of bank fraud. The indictments were returned December 11, 2013, but remained sealed until the defendants appeared in federal court for arraignment on Jan. 10 in St. Louis.
   If convicted, each count of bank fraud carries a maximum penalty of 30 years in prison and/or fines up to $1 million. In determining the actual sentences, a judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.
  The case was investigated by the Office of the Special Inspector General for the Troubled Asset Relief Program and the Federal Bureau of Investigation. Assistant United States Attorney Tom Albus is handling the case for the U.S. Attorney’s Office.
   Defendants are presumed innocent until proven guilty.
   Source: Federal Bureau of Investigation

Economic Confidence Higher Year Over Year

   RIVERWOODS, Ill.- (BUSINESS WIRE) - 12/5/2012 -The Discover U.S. Spending Monitor declined 2.7 points to 95.4 in November from 98.1 in October, reflecting lower consumer confidence in personal finances. However, consumers indicated that they intend to spend more in December during the holiday season. The Monitor is a 5-year-old daily poll tracking economic confidence and spending intentions of nearly 8,200 consumers throughout the month.
Consumers Maintain Economic Confidence
   The percentage of consumers rating the U.S. economy as good or excellent remained the same as October at 18 percent, up 10 percentage points from November 2011.
   In November 2012, 51 percent of consumers viewed the economy as poor, an 11-point decrease from November 2011.
   Female respondents who rated the economy as good or excellent in November increased 2 percentage points to 18 percent compared to October. However, male respondents who rated the economy as good or excellent declined 3 percentage points from October, also to 18 percent.
   Remaining at a Monitor high, 35 percent of respondents expect the economy to improve, a 16-point year over year improvement from November 2011.
   Consumers with an income of greater than $75,000 and those making between $40,000 and $75,000 both reported a decline in expectations of the economy getting better (down 2 points to 44 percent from October and down 1 percentage point to 34 percent, respectively). However, those making less than $40,000, who felt the economy was getting better, increased 3 percentage points to 31 percent.
Outlook on Personal Finances Declines
   Consumer outlook on personal finances declined from October to November 2012, but remained up year over year.
   Consumers rating their personal finances as good or excellent declined 2 percentage points in November from the previous month to 35 percent. However, this is 2 percentage points higher than November 2011.
   While the percent of respondents who expect their personal finances to improve in the future declined 2 points from October to 26 percent, this is 7 percentage points higher than November 2011.
Respondents between ages 18 to 39 who rate their personal finances as poor increased 7 points from October to 28 percent.
Consumers Intend to Spend More in December
   Despite a decline in confidence about their personal finances, 39 percent of consumers are gearing up for the holidays and have plans to increase their spending in December. This is up 9 percentage points from last month and is typical this time of year. Twelve percent of consumers also plan on increasing their discretionary personal spending such as going out to dinner and the movies, up 3 percentage points from last month.
   However, consumers plan to offset their discretionary spending in other areas.
   On major personal purchases such as a vacation, 46 percent expect to spend less, up 1 percentage point from October.
   On household expenses, such as gas and groceries, 9 percent of consumers expect to spend less next month, up 2 percentage points from October.
   Consumers also plan to spend less on household improvements next month, a 2-point increase from October to 49 percent.
   42 percent of respondents intend to save or invest less in December, up 4 percentage points from last month.
About Discover U.S. Spending Monitor
    The Discover U.S. Spending Monitor is a monthly index of consumer spending intentions and capacity that is based on interviews with a random sample of 8,200 U.S. adults conducted at a rate of 275 per night. In addition to spending, the survey asks consumers their opinions on the U.S. economy and their personal finances. The Monitor began in May 2007 with a base index of 100. Surveys are conducted by Rasmussen Reports, an independent survey research firm (http://www.rasmussenreports.com).

Officials Target Civil Business Opportunity Cases

   (USDOJ) - 11/15/2012 - The Justice Department announced on Nov. 15 the filing of several criminal and civil business opportunity fraud cases, initiated as part of a joint sweep with the Federal Trade Commission and several states. Business opportunity fraud schemes take advantage of people looking for work by luring them in with false promises of big profits and leaving them worse off than they started. The cases include criminal charges against 14 individuals and civil cases against three businesses. The criminal and civil cases announced today are part of a series of investigations named “Operation Lost Opportunity.”

    The Justice Department’s cases are part of the efforts of the President’s Financial Fraud Enforcement Task Force and are being handled by the Civil Division’s Consumer Protection Branch, in coordination with the U.S. Attorney’s Offices for the Central District of California, the Southern District of California, the Southern District of Florida, the District of Oregon, the Western District of North Carolina, the Western District of Pennsylvania and the Southern District of Texas.

    Seven different business opportunity schemes are the targets of the Justice Department’s actions.   According to the charging documents, the criminal schemes involved placement of advertisements online and in newspapers that touted the profits that could be earned by purchasing a business opportunity to own and operate vending machines or display racks.   The United States alleges that the schemes operated as follows:     Salespeople explained that consumers who purchased the opportunity would earn substantial income from the equipment.   According to the sales pitch, the vending machines or display racks would be placed in store locations in the purchaser’s hometown and would offer candy, refreshments or jewelry, depending on which opportunity was being offered.   According to the sales pitch, the purchaser would then receive profits based upon sales from the vending machines or display racks.

    “In an attempt to lure wary consumers, fraudsters have crafted business opportunity schemes that promise what appear to be more realistic returns backed up by false success stories,” said Tony West, Acting Associate Attorney General.   “But we are more determined than ever to bring to justice those who are defrauding Americans out of their time, money, and faith in our economic system – this law enforcement sweep represents a coordinated effort to combat business opportunity fraud on multiple fronts.”

    Enticed by the promise of a “turnkey” business, hundreds of consumers lost millions of dollars purchasing the fraudulent business opportunities targeted in this sweep.   The four businesses involved in the criminal component of the sweep include the following:  

·          Mark Five Inc., a Houston company that promoted a jewelry business opportunity.   O n November 12, 2012 and November 14, 2012, the Department of Justice filed criminal informations charging Billie Joyce Sanders and Michael Cupina in connection with their conduct at Mark Five.   Each defendant was charged with conspiracy, which carries a maximum prison term of five years.   According to the charging documents, Mark Five salespeople referred potential business opportunity buyers to Sanders and Cupina, who falsely claimed to own and operate successful jewelry display racks.   One other individual was previously charged in connection with Mark Five.   In February 2012, a grand jury in Houston indicted Mark Five principal Robert King on charges of conspiracy to commit mail and wire fraud, and substantive mail and wire fraud.   King’s trial is scheduled for February 2013.

·          The Lauren Jewelry Collection, an Atascocita, Texas, company that promoted a jewelry business opportunity.   On November 13, 2012, the Department of Justice filed a criminal information in the Southern District of Texas charging Regina Rush in connection with the Lauren Jewelry Collection.   Rush was charged with one count of conspiracy, which carries a maximum prison term of five years.   According to the charging document, Rush served as the proprietor of the firm and made false representations about the success of distributors and the authenticity of references.   The charges state that Rush encouraged potential purchasers to call references who made false statements about their experiences with the Lauren Jewelry Collection.

·          American Vending Systems (AVS), a Colorado company that promoted energy candy business opportunities.   On November 14, 2012, the Department of Justice filed a criminal information in the Western District of Pennsylvania charging Pearl Pastilock in connection with her conduct at AVS.   Pastilock was charged with one count of conspiracy, which carries a maximum prison term of five years.   According to the charging document, AVS salespeople referred potential buyers to Pastilock, who falsely claimed to own and operate successful energy candy vending machines.   Five other individuals were previously charged for their conduct at AVS and related firms.   Richard Black, Gary Luckner, Lou Gubitosa, Trey Friedmann and Mel Hendricks were all charged and pleaded guilty to conspiracy charges for this conduct.

·          Multivend LLC, dba Vendstar, a New York company that promoted candy vending machine business opportunities.   On Oct. 10, 2012, a grand jury in the Southern District of Florida indicted 10 individuals for misrepresenting a number of facts in connection with the sale of Vendstar business opportunities.   More information about these charges can be found at:  

www.justice.gov/opa/pr/2012/October/12-civ-1217.html

    The charging documents referred to above contain only accusations against the defendants and are not evidence of guilt.   The defendants should be presumed innocent unless and until proven guilty.

    The civil cases the Justice Department filed allege that three businesses violated the Federal Trade Commission’s Business Opportunity Rule.   The businesses include:

·          The Zaken Corp., also doing business as The Zaken Corporation, QuickSell and QuikSell, (Zaken).   Zaken is alleged to be a Thousand Oaks, Calif., corporation that offers a work-at-home business opportunity.   According to the complaint against Zaken and its corporate officer Tiran Zaken, the defendants offer consumers a business plan to locate and contact businesses with excess inventory to sell.  The complaint alleges that Zaken represents that once purchasers of the opportunity identify businesses interested in selling excess inventory, Zaken will find a buyer for the inventory and give the purchaser a “finder’s fee” equal to half of the total sales price.   Among other allegations, the complaint filed by the Justice Department alleges that Zaken makes unsubstantiated claims, including that purchasers “can make thousands of dollars monthly for working just 2 to 4 hours a week from home.”   This case was filed in the U.S. District Court for the Central District of California.

·          Christopher Andrew Sterling, doing business as Sterling Visa, Rebate Data Processors and Credit Card Workers.   Sterling is alleged to have run several work-at-home schemes from Southern California.  According to the complaint, Sterling represents that purchasers of his opportunity will make a substantial income by “processing” applications for product rebates or credit card applications. Among other allegations, the government’s civil complaint alleges that Sterling failed to make required disclosures under the FTC’s Business Opportunity Rule and made unsubstantiated earnings claims.   This case was filed in the U.S. District Court for the Southern District of California.

·          Smart Tools LLC, a Tualatin, Ore., company.   The complaint against Smart Tools and its corporate officer, Kirstin Hegg, alleges that the defendants have marketed a work-at-home business opportunity that teaches purchasers to locate people who are eligible for a partial refund of their FHA mortgage loan insurance premium.   According to the complaint, the defendants tell potential buyers that they can charge a fee for information on how to obtain the refund.   The defendants allegedly sent postcards to potential buyers stating that purchasers can earn up to $38,943 per year without stating what, if any, substantiation supports the earnings claim.   Such a claim violates the FTC’s Business Opportunity Rule.   This case was filed in the U.S. District Court for the District of Oregon.

     Source: Financial Fraud Enforcement Task Force

Survey Points to Changes in Consumer Spending

   NEW YORK - (BUSINESS WIRE) - 3/4/2012 - A shocking 52 percent of Americans are struggling to afford the necessities, and for many even that is a stretch, according to WSL/Strategic Retail, the leading authority on shopper behavior and retail trends. The finding was revealed today as part of the Company’s How America Shops® MegaTrends report, Moving On 2012.
   Youth market no longer retail’s golden ticket. The youth market, 18-34 year olds, has the highest percent of those who do not have enough money to cover their basic needs, with close to a quarter (24  percent ) in financial turmoil. Compared with people over 35, who were able to launch their careers 10 years ago, when times were good, this group is a long way from recovery, compelling retailers targeting this group to seriously rethink their strategies.
   Branded products under threat. Shoppers in general are placing a greater focus on price, with two thirds (67  percent ) of women agreeing that trusted brand names are not worth paying more for. More than a quarter (26  percent ) of women admit that while they used to buy brand names they could not afford, they are no longer giving in to this indulgence. This figure is up 7 percentage points from 2010.
   Six-figure incomes struggle. It takes a significantly higher income to feel financially secure in this economy, with nearly 30 percent of Americans in the $100-150K income bracket claiming they can only afford the basics. Once considered affluent, six-figure income shoppers are now identifying themselves as middle-income.
   “There is a huge fundamental issue when more than half of Americans can only afford basic necessities and people who earn up to $150,000 think they are poor,” said Wendy Liebmann, CEO of WSL Strategic Retail. “Look, American shoppers are moving on and coming back to shopping, but at their own pace. As a result, retail sales are precarious and likely to fluctuate up one month, down the next. That’s not going to change any time soon. Brands and retailers cannot ignore this. They will need to re-think the way they do business over the next three to five years - or longer.”
   “The youth market, which has traditionally been known for its enthusiastic spending of discretionary income, has virtually dried up. As today’s young adults struggle to find employment and pay down student loan debt, this demographic now represents the largest percentage of Americans who are challenged to afford even basic necessities,” WSL Stragegic Retail President Candace Corlett said.
   Key additional findings:

• A stunning 75  percent  of women now say it’s important get the lowest price on everything they buy, up 12 percentage points. from 2008 and up 22 percentage points from 2004. Some old and new methods of ensuring they get the lowest price include:
• 68  percent  regularly use coupons to reduce costs -- up 7 percentage points. vs. 2010.
• 45  percent  claim they only buy items that are on sale -- also up 7 percentage points
• 43  percent  make a point to search online for store discounts before they shop -- up 10 percentage points
• 14  percent  of women say they use their mobile phones while in store to see if they can find a lower price, before they buy.
• The “cautious pause” before buying to ask, “Is this a smart use of my money?” (Total: 66  percent , HHI $150K: 47  percent )
• Managing their aspirations by sticking to brands and stores they can afford (Total: 58  percent , HHI $150K: 36  percent )
• Staying out of stores where they might be tempted to overspend (Total: 48  percent , HHI $150K: 28  percent )
• Buying less when they go shopping (Total: 43  percent , HHI $150K: 26  percent )

   WSL/Strategic Retail draws several conclusions from the study to enable retailers to define and prepare the right retail strategy as consumers return to shopping, but with new rules and restrictions that influence what they buy and where they buy it. Notes on survey methodology and analysis: WSL/Strategic Retail conducted an internet survey from December 1-12, 2012. The survey included 1,950 respondents drawn from a nationally representative online sample.