The Conference Board (08/25/2015)

The Conference Board Consumer Confidence Index rebounded in August, now standing at 101.5, up from the decline to 91.0 in July. The Present Situation Index increased by 11.1 to hit 115.1 in August, and the Expectations Index also improved, going from 82.3 in July to 92.5 this month. “Consumers’ assessment of current conditions was considerably more upbeat,” said Lynn Franco, director of economic indicators at the Conference Board. Franco attributed this shift in attitude to “a more favorable appraisal of the labor market.” Those saying business conditions are “bad” declined modestly from 18.2% to 17.6%, and those saying conditions are “good” decreased only slightly from 23.4% to 23.2%. Consumers present positive evaluations of the job market as well, with 21.9% stating jobs are “plentiful,” up from July’s 19.9%. Those claiming jobs are “hard to get” decreased notably from 27.4% to 21.9%.

Consumers’ short-term outlook also improved in August. Consumers expecting business conditions to improve over the next six months increased from 15.3% to 15.8%, while those expecting business conditions to worsen correspondingly declined from 10.3% to 8.3%. There was also a more positive outlook regarding the labor market. Those anticipating more jobs in the months ahead increased from 13.7% to 14.6%, and consumers expecting a decline in their income decreased from 11.3% to 10.0%.

Associated Press (08/24/15) Christopher S. Rugaber

A majority of nearly three dozen economists predict lackluster economic growth, weak pay gains, and modest hiring for at least the next two years, according a survey from the Associated Press. Almost 70% of the surveyed economists said that they thought the economy’s growth would remain below its long-run average of 3% annually through 2017—a pace it has not attained since 2005. Fifty-eight percent of respondents indicated that they believe wage increases for the next two years will remain below a long-term annual average of 3.5%. While many economists thought that the falling gas prices and strong hiring rates would finally produce a 3% economic growth rate for 2015 at the start of the year, there is “no longer…reason for optimism that the economy is going to accelerate,” said Mike Englund, chief economist at Action Economics.

Washington Times (08/25/15) Tom Howell

The Affordable Care Act’s “Cadillac tax” will impact one in four employers that offer health care benefits, the Kaiser Family Foundation says in a report being released today. Approximately 26% of companies will be affected by the tax when it takes effect in 2018 and 42% of employers will be paying the levy a decade later, signaling just how quickly health care costs are expected to rise, the report states. Kaiser said some employers probably will cut back on the scope of their plans to duck the tax, resulting in coverage with higher deductibles or networks with fewer doctors.

Formally known as the high-cost plan tax, the provision is a 40% excise on the cost of health care coverage above $10,200 for an individual and $27,500 for a family, although those amounts could change when the government issues final regulations for 2018 and as it indexes the thresholds for inflation in later years. Labor unions, which generally back Democrats, have balked at the tax. They say they often negotiate for better health care plans instead of higher wages and now will have to grapple with benefit cuts because of government pressure.

Wall Street Journal (08/24/15) Julie Jargon

Chipotle Mexican Grill Inc. plans to hire 4,000 employees in a single day next month, which would expand Chipotle’s 59,000-member workforce by nearly 7%. The planned Sept. 9 hiring binge is one of the starkest examples yet of increased recruitment efforts as the restaurant industry struggles to attract and retain employees. A stronger economy, rising demand for restaurant meals, and a string of minimum-wage increases imposed by cities and states have shrunk the pool of available workers. Some competitors have responded by boosting wages and offering more perks to employees, part of what Wendy’s Co. chief financial officer Todd Penegor earlier this month called an industry “war for talent.” Chipotle, too, has beefed up benefits. It has expanded college-tuition reimbursement to all hourly workers, added paid sick days, and increased the amount of paid vacation it offers.

Average U.S. hourly wages for production and nonsupervisory employees in limited-service restaurants rose 3.3% to $9.62 an hour in June, compared with a year earlier, according to U.S. Department of Labor data. That exceeded the 2% growth for the same period in wages for similar jobs in the private sector overall, including restaurants. The number of employees in limited-service restaurant jobs rose 3.7% in June from a year earlier, outpacing the 2.5% growth in total private-sector jobs. Chipotle plans to open its nearly 1,900 restaurants three hours earlier than usual on Sept. 9, interviewing candidates until customers start walking in at 11 a.m. in each time zone.