Buckle Up
The U.S. loses 92,000 jobs, gas prices soar, and tariff uncertainty reigns.
Good morning!
Here are today’s highlights:
Grasshopper Bank CEO Mike Butler explains what a digital bank can offer business owners.
Businesses are choosing to buy equipment instead of hiring employees.
With tariff rates lower, at least for the moment, businesses are rushing to take advantage.
When, if ever, does it make sense for owners to share their opinions about what’s happening in the country and the world? Three brave owners discuss.
THE ECONOMY
U.S. hiring falls unexpectedly: “The U.S. lost 92,000 jobs in February, a sign that the job market continues to struggle across a broad range of sectors. The hiring numbers, reported Friday by the Labor Department, fell far short of January’s gain of 126,000 jobs. They were worse than the gain of 50,000 jobs that economists polled by The Wall Street Journal had expected to see. The unemployment rate ticked slightly higher to 4.4 percent. U.S. stock futures, which were in the red before the report, turned further downward.”
“The labor market slowed markedly last year, with the U.S. adding the fewest jobs outside of a recession since 2003. That was in part due to the Trump administration’s cuts to the federal workforce through a combination of layoffs and voluntary buyouts, but it also reflected the cautious approach to hiring that many businesses adopted to combat uncertainty about tariffs and other policy measures.” READ MORE
Gas prices continue to rise: “John Andrews, a South Carolina-based chef who runs a meal delivery service, estimates he drives over 100 miles every week to deliver fresh home-cooked meals to his clients. ‘The economy is killing me on food prices. And gas prices are tough now, too,’ Andrews said. ‘It’s kind of a double whammy. I’m working just as hard as ever, but I’m losing ground here.’ After several years of higher operating costs and softer consumer demand, gas prices are climbing as the war with Iran escalates. That’s adding pressure on small businesses, which power the U.S. economy and account for most of the country’s jobs.”
“Kareem Miller began operating his Chicago-based trucking business, Strong Pact Trucking, about three years ago. Today, he has three trucks that he estimates collectively drive about 1,200 miles per day. His vehicles, like the overwhelming majority of large trucks, run on diesel fuel.”
“Miller estimates the recent jump in fuel prices has already added about $100 to his gas bill this week. His company mostly hauls construction materials, and if diesel keeps climbing, he says he’ll have little choice but to raise his transportation rates. Many small businesses depend on trucking companies like his to move goods across the country. If those rates rise, the higher costs can ripple outward in the form of higher prices.”
“‘How far is this going to go? Because that’s going to affect the whole economy,’ Miller said. ‘The trucking industry is a microcosm of the economy.’” READ MORE
In an uncertain economy, companies are choosing to spend on equipment rather than labor: “There’s been a lot of evidence in recent months that businesses have been pouring money into new equipment. Spending on durable goods has been strong, and so has demand for business loans to finance new equipment. At the same time, businesses have not been spending as much on new employees. That’s because for many businesses, new equipment can help them become more efficient at a time when the economy is uncertain and available labor is hard to find.”
“Over the last few months, a mountain bike company based in Colorado called Revel Bikes has been buying new molds for making carbon-fiber bike frames. ‘It’s a big chunk of steel with our specific design that we can then put material in, and turn that into a bike frame,’ said Adam Miller, Revel Bikes’ owner. Miller said the molds cost upwards of $120,000 each. They’re worth it, he said, because sales have been strong.”
“‘Year to date, our sales are about three times higher than what we had originally planned on, which is phenomenal news,’ Miller said. ‘But that also means we need to invest more money into buying more frame molds in order to keep up with that production.’ The company also just moved into a new headquarters closer to Denver, which will save the company money on shipping. That’s the kind of efficiency Miller wants from every investment that Revel Bikes makes.”
“We’re not buying a fancy new conference table for our new headquarters, but we are investing heavily on the latest and greatest inventory control software so that we can make sure we can build bikes efficiently, and get them out the door efficiently,’ Miller said.” READ MORE
THE 21 HATS PODCAST: DASHBOARD
Can a Digital Bank Deliver for Business Owners? In this sponsored conversation, Mike Butler, CEO of Grasshopper Bank, says business owners shouldn’t have to choose between speed and stability when it comes to their bank. Grasshopper has no branches, but it does offer full-service lending — with the quick decisions you might expect from an alternative lender and the rates you’d expect from a traditional one.
Butler also explains how the bank is using AI to simplify everyday tasks — like finding a specific transaction in seconds instead of digging through statements — and we talk about a question many owners still wonder about: Do you lose something when you give up the local banker relationship? Along the way, we discuss which businesses are the best fit for Grasshopper, what customers actually value most, and why Butler decided to merge the bank with a larger company, Enova.
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
