GDP, Consumer Spending, Conflicting Business Data, and TikTok Recruiting

Hey everybody, it’s Gene Marks, and welcome to this week's episode of the Paychex THRIVE Week in Review. This is where we look at a few news stories that impact your small business and mine and talk about it just a little wee bit.

So, first of all, let's go to the economy. Two good pieces of news last week from the government. Revised GDP data from the Commerce Department put second quarter economic growth at 3.8%. Now, that was up from an initial 3% in the first reading of this data. I think it's the second or third revision of this data. The good news is that the economy is growing stronger than we thought.

The bad news is we have to really be careful as to what data we're reading from the government, at least on the first time they release this data, because you can see there are significant changes when revisions do come.

Also, good news that came from the government has to do with consumer spending. U.S. personal spending rose at a solid clip, according to Bloomberg, for a third month through the end of August, suggesting consumers continue to power the economy despite elevated inflation.

Consumer spending adjusted for changes in prices increased 0.4% last month, according to the Bureau of Economic Analysis, they said at the end of last week. The consecutive strong gains in consumer spending add to evidence of a solid economy in the current quarter, building upon even greater growth in the prior period than previously thought.

However, maintaining such momentum hinges in large part on the labor market, which has shown signs of faltering with slower hiring and more moderate wage gains.

We will talk next week about the Paychex Small Business Employment Watch to see how hiring and wage gains are holding up through the end of September. But, still good news, both from GDP and consumer spending.

Two conflicting bits of news came out this week from two separate studies that I thought I would share with you. The first is from KeyBank. They did a study of small business owners and found that one in four of them are in survival mode — 23% of small business owners said they were stuck in survival mode. Fifty percent cited inflation and rising costs as a top concern. Forty-one percent are worried about payment fraud, phishing, and identity theft, and 72 % are concerned about upcoming legislative changes. So, not great news from this survey from Key Bank.

However, during the same week, another survey was published, this time from MetLife and the U.S. Chamber of Commerce, which reported the exact opposite of the survey from KeyBank. Their report was that small businesses are reporting good health and comfort with their cash flow. About seven in 10 say their business is in good health this past quarter. Stable from last quarter — it's actually up a little bit — and up from 66% to 72% in this quarter saying that they're in good health.

In the same vein, three in four — 76% — now say they are comfortable with their cash flow, stable from last quarter and showing increased comfort from this time last year.

So, one survey saying small businesses are in trouble and are in survival mode and another survey in the same week saying they're actually reporting good health and have good comfort with their cash flow. Who to believe? Just be very, very careful when you're reading these small business surveys, okay?

Finally, a little story on TikTok because TikTok, as we know, looks like it's going to continue on thanks to the Trump administration's deal that they are making with TikTok's owners. Just want to be clear that HR Brew has made a report this week about TikTok's importance for recruiting.

A recent survey from the job platform Handshake showed that college graduates in particular are seeking out authentic representations of prospective employers online. One respondent reported that they watched day-in-the-life videos to get a sense of a company's work culture and work-life balance, and 73% of the graduates that were surveyed said they'd be more likely to apply for a job after seeing content such as videos or messages from an employer. Hence, TikTok.

This is why TikTok is becoming a better and more popular place for employers to use to recruit new employees. It is not just about putting job ads on TikTok, but also just showing what kind of a company you are.

By the way, it doesn't necessarily have to be TikTok. Can be your Facebook page. It can be YouTube, as well, but it is really, really important if you're an employer and you're looking for good people to have lots of videos showing what kind of a company you are; interviews with your current employees, interviews with customers, taking a walk around the facility and the plants or job sites just to show what it's like and how good it is to be working at your company.

These are really, really important things to provide, and TikTok looks like it's becoming a growing platform and popular for employers to post videos of what their company is like behind the scenes.

My name is Gene Marks, and you've been watching this week's episode of the Paychex THRIVE Week in Review.

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Do you have a topic or a guest that you would like to hear on THRIVE? Please let us know. Visit payx.me/thrivetopics and send us your ideas or matters of interest. Also, if your business is looking to simplify your HR payroll benefits or insurance services, see how Paychex can help. Visit the resource hub at paychex.com/worx. That's W-O-R-X. Paychex can help manage those complexities while you focus on all the ways you want your business to thrive.

I'm your host, Gene Marks, and thanks for joining us.

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