Producer Price Index Worrisome, World Cup Pitch on Tipping, Claude SMB Training

Hey everybody, it's Gene Marks and welcome to another episode of the Paychex THRIVE Week in Review. This is where we take a few items in the news that impacts your small business and mine, and we talk about it a little bit.

Before we get started, chances are if you're a THRIVE listener, you already know that running a business takes passion and vision and a whole lot of hard work, but no one said you have to do it all alone. That's where Paychex comes in. From payroll to HR to employee benefits, they've got the tools and expertise to help you manage the day to day so you can focus on what truly matters, building your business and achieving your goals.

So, see how Paychex can make a difference for you. Get to know them better at paychex.com/meetpaychex. That's paychex.com forward slash meet Paychex. You can also find the link below in the show notes. Okay, let's get to the news of this week.

The first item of news that's of importance to all of us is pricing, and there was bad news. For starters, inflation was up from the consumer price index, but I don't really follow the consumer price index as much as I follow the producer price index, and the PPI or the producer price index rose sharply this past month.

This is from an article in the New York Times. New government data show the U.S. wholesale prices rose sharply in April, reinforcing concerns that inflation remains stubborn despite hopes for moderation. The PPI, which measures prices businesses pay for goods and services, post its largest increase in years – 6% annual rate – driven heavily by rising energy, transportation and manufacturing costs. Economists worry these increases will eventually be passed on to consumers through higher retail prices.

Core wholesale inflation, excluding food and energy, also accelerated, suggesting broader pricing pressures throughout the economy.

The report complicates the Federal Reserve's path on interest rates, making near-term rate cuts likely. Markets reacted cautiously as investors reassessed inflation expectations and the possibility of higher borrowing costs lasting longer than anticipated.

For small businesses, the report signals continued pressure on margins, inventory costs, freight expenses, and wage expectations throughout the remainder of 2026. Not great news.

The PPI is an inflation indicator that's really a leading indicator. It shows you what inflation is going to be as it hits consumers in the next two, three, four months, right? I mean, this is the cost of producing stuff and ultimately that stuff is going to get out to markets. Yeah, so with costs going up – and I realize they're driven by energy costs right now – we don't know if that's short term or if it's long term, but it's still a fact.

So many products from office supplies to lubricants to cleaning supplies that involve petroleum or petroleum-based products in some way. So, it's going to have an impact all across the board. It's not just the price of the pump. And speaking of the price of the pump, not only your workers be paying more – your employees – also for freight transportation costs are going to be higher, as well. We need to prepare for this now.

There are certain actions you can be taken to review your overhead, maybe have your employees work from home a little bit more often while this is going on. It's not going to be, you we don't know how long it's going to last, but hopefully not forever. You might want to buy in bulk and in advance, maybe have some consultants in to consult on how you're using your energy in your business or take a look at your freight bills. These are all things that you should be taking into consideration because the costs themselves are going to be going up as we've seen over the next few months, and that is going to have an impact on your small business and mine.

So, bad news about PPI this month. We'll see if it turns down again, but a 6% annual rate ain't great. All right.

The next bit of news comes from Fox News. It is about automatic tipping and apparently it is bringing concerns to major U.S. city businesses as restaurants brace for the surge of foreign visitors. So, here's the story from Fox News. Restaurants in Kansas City are debating whether to temporarily add automatic gratuities during the 2026 FIFA World Cup as they prepare for a large influx of international visitors who are unfamiliar with American tipping customs. The Missouri Restaurant Association is encouraging restaurants to consider adding a 20% service charge to protect servers earnings during the event.

Supporters argue that many visitors from Europe and other regions come from countries where tipping is uncommon or significantly lower than in the United States. Critics, however, warn that mandatory gratuities could frustrate customers already experiencing the tip fatigue, and fuel broader backlash against rising service charges in restaurants.

The debate reflects a larger national conversation over tipping, culture, hospitality, wages and customer expectations. Restaurant operators are balancing the need to support workers financially while avoiding negative reactions from diners concerned about increasing costs and lack of transparency in restaurant billing practices.

Okay, so a few comments on this, all right. If you're that concerned about your wages of your workers in your restaurant, then obviously you can be doing something about that on your own instead of asking your customers to tip more. Perhaps you could be increasing your prices a few percentage points, which probably wouldn't make a difference and using those increases to help out pay your employees. So that's number one.

Number two, putting a mandatory gratuity on bills is not going to make people happy, and I'm not sure it's going to fix the problem because if you're a tipper from Germany or the UK or whatever, you're not used to doing this kind of stuff and it might just, you know, just bristle your existing customers. And I'm not sure if it's going to change anybody's know your way of thinking.

To me this is all about a communication problem. I really do think that if you're a business that's going to be having a lot of customers coming in that are related to FIFA – outside visitors, people from other countries – I think you should take it you know make it a point to take some of that information and you'll communicate to these customers that tipping is a normal practice here in the U.S.; Maybe it's a flyer that you attach to each of the menus that you hand out that just lets your customers know like, hey, “Welcome to America and happy to have you. Tipping is customary here and it's generally around 15 to 20 percent.” That way, at least your customers know it. It's not mandatory, but at the same time, I'm sure many of them will be like, OK, well, when in Rome, you know, and we'll tip.

So, that to me, is how you go about doing this. You know, if you don't want to increase prices to cover your employee costs, fine. Don't do anything mandatory. I think that's just … you're going to wind up upsetting a lot of people. Communicate to your customers, particularly if you're getting customers from overseas.

And finally, in this week's AI news, Anthropic has released Claude for Small Business. This report comes directly from Anthropic at anthropic.com. Anthropic announced Claude for Small Business, a new initiative designed to help smaller companies adopt AI tools without requiring large IT budgets or technical teams. The offering integrates Claude directly into commonly used business platforms, including QuickBooks, PayPal, HubSpot, Kava, Google Workspace, Microsoft 365, and DocuSign.

Anthropic says the goal is to help small businesses automate everyday functions such as payroll analysis, bookkeeping, invoice management, sales campaign, customer communications, and operational reporting. The package includes pre-built workflows and AI skills tailored for finance, HR, marketing, and customer service tasks.

Anthropic is also launching a nationwide educational tour aimed at training local businesses owners on practical AI use cases. The company believes smaller firms have lagged behind larger enterprises in adoption because they lack the time, staffing, and technical expertise. The launch reflects growing competition among AI providers to capture the enormous small business software and productivity market.

My comments on this, for starters; One, most of this is not new. Claude has been integrating with these applications – QuickBooks and PayPal and whatnot – for a number of months at this point. It's just that we didn't really know about it, and a lot of my clients weren't taking advantage of it. So, you can connect without getting the Claude for Small Business edition.

I do like the skills. I haven't looked into the skills yet, but I'm planning on doing that really soon because if you can get an add-on for Claude that will just automatically integrate you and connect you to your QuickBooks or Microsoft or 365 or Google Workspace, great. But building skills you don't really know like “what do we do next?” and “how do we use it?” and “what kind of agentic task could Claude be performing?” – there's built-in skills for finance and even HR and marketing. I’d take a look at those and see what they do and see how they can benefit you and how you can be working them.

So, you know, if you're a Claude user definitely check out Claude for Small Business. I know I'm going to be doing that. Even if you're not a Claude user and you're a Chat GPT or Co-pilot or Gemini or any of the others, you will … I'm sure there will be similar offerings. Most of those chat bots do integrate with a lot of these applications already. Claude is just doing or Anthropic is doing a sort of a small business push. Definitely worth looking into. You want to use AI, definitely an option.

My name is Gene Marks, and you have been watching or listening to the Paychex THRIVE Week in Review. Now, remember, if you need help with your HR, where you going to go? You're gonna go to paychex.com/meetpaychex. If you want continuing information to help you stay on top of the news in your business, you're gonna subscribe to this YouTube channel, right?

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Thank you so much for joining me this week. We will see you again next week with another episode of the Paychex THRIVE Week in Review. See you then.

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

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