Small Business News

Smaller U.S. goods trade gap seen boosting first-quarter GDP growth

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The U.S. goods trade deficit narrowed sharply to a one-year low in March, as both imports and exports fell, suggesting economic growth in the first-quarter was probably not as weak as currently anticipated.

The Commerce Department said in its advance report on Wednesday that the goods trade gap tumbled 10.3 percent to $56.90 billion last month, the smallest deficit since February 2015.

While the improvement suggested there could be an upside surprise in gross domestic product growth for the first quarter, the weakness in both imports and exports is worrying as it implies softening global and domestic demand.

"Notwithstanding the improvement in the deficit, which signals a diminished drag on domestic GDP, the broad-based falloff in both exports and imports activity is a sobering sign of some weakening in domestic and global demand," said Millan Mulraine, deputy chief economist at TD Securities in New York.

Goods imports fell 4.4 percent to $173.6 million last month, outpacing a 1.2 percent drop in exports. March's comprehensive trade report, which includes services, will be released next Wednesday. The advance goods trade data will be included in Thursday's snapshot of first-quarter GDP growth.

Economists polled by Reuters have forecast GDP rising at a 0.7 percent annual rate in the first three months of the year. The economy grew at a 1.4 percent rate in the fourth quarter.

UPSIDE RISK

"It (goods deficit) suggests that first-quarter GDP growth will be much stronger than we previously believed," said Paul Ashworth, chief U.S. economist at Capital Economics in Toronto.

"We now estimate that first-quarter GDP growth was 1.4 percent annualized, whereas we previously thought it would be only 0.8 percent."

Imports fell broadly last month, with consumer goods plunging 9.7 percent and capital goods declining 3.2 percent.

The economy has been hurt by the lingering effects of the dollar's rally last year and sluggish global demand, which have eroded exports. Weak business spending, especially in the troubled energy sector, and ongoing efforts by businesses to reduce an inventory overhang have also acted as a drag.

U.S. financial markets were little moved by the data as investors awaited the Federal Reserve's decision on interest rates later on Wednesday.

The Fed is expected to keep its overnight benchmark interest rate unchanged given weak economic growth and tame inflation, but the statement accompanying the decision could shed light on the future course of monetary policy.

A separate report on Wednesday from the National Association of Realtors showed contracts to purchase previously owned homes rose 1.4 percent in March to a 10-month high. These contracts become sales after a month or two, and last month's increase pointed to a further pick-up in home resales in April.

Housing continues to be a bright spot in the economy, driven by a strong labor market. But a shortage of properties for sale, which is limiting choices for buyers and driving up prices, remains a constraint.

"The buying season is off to a good start that should ensure we indeed see the best year of total sales in a decade," said Jonathan Smoke, chief economist at Realtor.com in Washington.


 

Commercial Bank Loans

Whether your business is new, old, large or small, financing is essential in helping your company to grow, expand and take on new organizational strategies. "Business finance" simply refers to money and is a necessary foundation for businesses to thrive. For a business owner, it is important to be aware of the various finance sources so you can determine which source best suits your business’s needs.

 

Commercial Bank Loans

Taking out a business loan from the bank is one way to finance your business ventures. The process begins by applying for the loan, which often requires the business owner to compose a loan proposal. The Small Business Administration says loan proposals must include a written description of the company’s history, who its competitors are and what the funds would be used for, such as an explanation of the project.

If your company is approved, you and the bank can determine the details of the loan, such as what the interest rate is, what the duration of the loan will be and what the repayment grace period is. Pay special attention to the terms of the interest rate. If you can, get a fixed interest rate that does not fluctuate. Otherwise, you may find that your interest rate will increase, which requires your company to pay more on the loan than what was originally negotiated.

Corporate Credit Cards

A corporate credit card can be used as a way to finance some business expenses. If a business is expanding and has to pay for new furniture for a new office, for example, the corporate credit card is a no-hassle way of fronting the money. However, credit cards may not be enough to finance larger types of endeavors. Entrepreneur.com warns business owners that credit cards have astronomical interest rates (sometimes up to 20 percent), so this may not be a wise financing option unless the company intends to pay off the debt quickly.

Personal Resources

Using your personal funds is a direct way to finance your business. You can do this by applying your savings toward business expenses, taking out a line of credit on your home, cashing out retirement accounts and borrowing money from friends or family. The Small Business Administration points out that most new businesses are personally financed. If this is an option for you, the upside to funding your own company is that you have more control over the repayment options. For example, paying a relative back can be negotiated, whereas when you obtain money from a financial institution you are bound to its repayment terms.

Cross Platform Optimization

The days of running a campaign on only one specific platform are over! Consumers use many devices, so brands need to optimize across all devices to stay on top of the competition. Cross Platform Optimization gives marketers the tools to optimize a campaign in real-time based on their end goal, regardless of the medium. Through real examples of clients who were able to drive significant increases in performance using very simple optimizations, Advertising.com will discuss recent findings and best practices in cross platform optimization. Any brand or agency will find the information helpful in improving marketing results for the future of ad buying across devices.

Running A Small Business

 

Running a small business is not a child’s play. It’s only the scale of operations that is small; all other business inputs are almost the same. Whether you run a small web designing company, a small factory or a software company you got to be aware of the market forces and have keen business acumen.

All the more, you have to be wary of the stiff completion that has raised its head in the small business filed. Actually, with the advancement in technology, almost ever one is capable of opening up a small business. In such a scenario highest quality at reduced prices is the mantra that can aid you business tremendously.

If you chalk out a well defined plan and stick to it earnestly, there is no denying the fact that you can also be counted among the bigger players with the passage of time.

First of all, induct those people in your business who are motivated, dedicated and want to achieve something big in life. If your team lacks the killing instinct, you may have to change it after some time. Such a scenario is very dangerous from the stability and growth point of view of a small business.

Always have a positive outlook. Don’t concentrate on the negative aspects but employ them to devise strategies so as not to fall in their trap. It’s not possible to shun negative thinking altogether but it is surely possible to ignore it for the time being. Repeat this process from time to time and you would gradually see your business on a strong footing.

Don’t go in for big orders and contracts at the very outset. Some people are in the habit of showing off and consider it a big boost to the reputation of their business in case they are able to secure a big order. But such an impression is only workable if you are really able to deliver the goods.

Remember, you can feel secure when you have a number of achievements to your credit no matter how small they are. You cannot protect your business if you are constantly involved in controversies, breakdowns and dishonoring of deadlines.