Getting to 2%

MESSAGE FROM THE PRESIDENT

May 13, 2024

It’s now mid-May and many are wondering if the Federal Reserve will lower interest rates this year. Now I’m about as optimistic a person as they come, but I’m also a realist and I just never saw a pathway for rate cuts. With the biggest generation in the history of mankind—Baby Boomers—now almost fully into retirement, gone with them are the people that fueled consumer spending and capital investments. Furthermore, many retirees “de-risk” their portfolios and move whatever savings they have into more conservative investment strategies. The inevitable drop off of investment capital is starting to leave the market at the very moment we’re going to need more capital for expensive projects like the reshoring of manufacturing. Therefore, when you stop and consider the two mandates that drive Fed policy—full employment and stable prices—a murky picture starts to emerge.

Inflation is now hovering around 3% and the Fed target for inflation is 2%. With so much economic churn occurring worldwide as globalization as we knew it ends, getting to 2% may just not happen. Wages are still inflated, and a growing list of important products like electric transformers have delivery dates of 3 to 4 years. When you couple together changing demographics and deglobalization, you can begin to see why the Fed may not move forward with rate cuts. We’re entering a time in the history of economic life cycles that have never been seen before. It will be interesting to see if the Fed looks for different economic tools as the reliable measurements they have used for decades become less strategic.

News You Can Use

Economic news for the week gets started tomorrow with the producer price index and the April results. Fed Chair Jerome Powell has Tuesday morning remarks. Wednesday starts with the consumer price index from April, U.S. retail sales from April, and March business inventory data. The Philadelphia Fed manufacturing survey for May is released on Thursday, and we’ll see April housing starts and building permits. We wrap up the week on Friday with U.S. leading economic indicators and results from April.

Companies with earnings calls kicks off on Tuesday with Home Depot, International Gaming Technology, and Lions Gate Entertainment. Dole, Cisco Systems, and ZTO Express are scheduled for Wednesday, while Walmart, Deere, Under Armour, and others round out the week.

Michael J. Quaranta

President

Delaware State Chamber of Commerce

Uniquely Delaware

Assessing the Entrepreneurial Ecosystem in Delaware - 2024 Report

Delaware is well known as one of the most business-friendly states in the country. The state’s geographic advantages have also made Delaware a favorable destination for businesses. Data shows that in 2020, the rate of people becoming entrepreneurs in the state of Delaware was lower than the national average (0.27% as compared to 0.34%), but in the same year the state created more jobs through entrepreneurship (6.3 jobs per 1,000 people) than jobs created at startups nationwide (5.0 jobs created per 1,000 people). In the same year, 76.2% of startups lasted at least one year in the state, which was comparable to the national average (78.1%). In addition, in May of 2023, Delaware topped Shopify’s Entrepreneurship Index as the number one state where entrepreneurship is driving economic growth year over year (based on users of Shopify’s platform).

Innovation and entrepreneurship play an important role in Delaware’s economy and while there have been successes, there is room to improve the state’s entrepreneurial ecosystem to make it a more desirable location for startups. Recognizing the potential to bolster this ecosystem, the Delaware Workforce Development Board (DWDB) released the 2024 Assessing the Entrepreneurial Ecosystem in Delaware report >

KEY FINDINGS

1. A robust support system exists for entrepreneurs, but redundancy and relevancy of services create challenges

2. The Entrepreneurial Ecosystem has a strong foundation but needs improved coordination and accessibility.

3. There is a growing number of financing options, but many entrepreneurs still lack access.

OPPORTUNITIES

1. Creation of a centralized, accessible entrepreneurship hub.

2. The intentional establishment of a strong entrepreneurial network of mentors and investors in the state.

3. Development of a career path for entrepreneurship to ensure it is part of the workforce development pipeline.

The Innovation Space is a 501(c)3 nonprofit, multi-dimensional, resource-rich entrepreneurial innovation ecosystem. Their goal is to transform science-driven startups into successes.

Learn more