It’s a great time to own a business as the economy continues to gain strength. Sure, there are some legitimate concerns, including a complex geopolitical environment, but on the whole the global economy looks to be stronger than it has been in years. We’re seeing an increasing number of businesses reach out to us for funding so that they can tap into the strong market and opportunities. And why not? You have to strike while the iron is hot.
First up, retail sales continues to gain strength. We pay especially close attention to this. For one, many of our cash advance clients are actually retail companies serving end consumers. Second, consumer spending makes up the bulk of the American economy. There might not be a better single indicator of a strong economy than rising consumer spending.
Retail spending in April grew by a solid .4% from a month earlier. This is the strongest reading in three months. Meanwhile, the University of Michigan consumer sentiment index rose to 97.7. This number might not mean much to you, but it’s the highest reading since January. And that January reading, by the way, marked a 13 year high. On the whole, consumers are both confident and are spending money.
As the below chart shows, gas stations, restaurants and bars, and grocery stores have been enjoying especially strong growth. Unsurprisingly, many of our merchant cash advance clients are coming from these sectors.
Meanwhile, the labor market continues to tighten up. The unemployment rate has dropped to 4.4% and employers are starting to struggle to fill positions. Salary and staffing needs are frequently cited by companies looking for merchant cash advances, and with the labor market so tight, we expect this challenge to continue.
Average salaries for recent college graduates have risen to nearly $50,000 dollars. This is the highest amount in at least a decade. When adjusted for inflation, this marks a 14% increase from starting salaries in 2007, back before the Great Recession. High salaries and a tight labor market present a challenge for small businesses. However, increased salaries also mean increased spending, which can be a big boon in the long run.
At least through the near term, the global economy looks set for growth. We expect the United States to enjoy the strongest growth, but Europe should see its fortunes rise as well. Barring any major developments, now is a great time for small businesses to expand! Lacking in funds? Consider a merchant cash advance.