Anyone who’s traveled internationally knows the world is a big place and every country has differences, however big or small. But how do those differences affect evaluating credit risk of foreign businesses?The truth is, international data is as nuanced as the countries themselves and once you scratch the surface, understanding credit risk solutions isn’t as straightforward as it seems. Many domestic assumptions don’t hold when working with international data. We’re seeing a trend across industries that may resonate with you: domestic credit managers are increasingly being tapped to take over a portion or all of their organization’s international portfolio. Sound familiar? Kyle Matthies, Experian's Director of Product Management delivered a very informative 15-minute Sip and Solve talk about the pitfalls and challenges of international data, check it out. Watch Our Sip and Solve Session What You Will Learn: Defining International Data: Demystify international data and its significance in global business. Components of Business Credit Reports: Understanding the elements that make up comprehensive business credit reports in an international context. International Data Challenges: Exploring the hurdles and complexities in gathering and interpreting global credit data. Bridging the Language Gap: Learn how to translate linguistic hurdles into effective risk assessment and communication. Assumptions Domestic Credit Managers Make: Debunking common misconceptions held by domestic credit managers when dealing with international data. Want more information about what Experian has to offer to help you assess international risk? Gain valuable global insight to reduce risk and increase profits through our international reports. Learn More

The November jobs report paints a picture of a robust yet nuanced job market. While job gains and a low unemployment rate inspire optimism for a soft-landing scenario, the cooling employment growth reflects the impact of Federal Reserve interest rate hikes on consumer and business activities. Labor shortages are gradually easing, but challenges persist, particularly in the service sector. Wage growth is slowing down, offering relief from recent highs and contributing to the mitigation of inflationary pressures. Moreover, a new layer of complexity emerges with a rise in layoffs, totaling over 16 million in the first 10 months of the year, representing a 12% increase from 2022. Although layoffs are expected to rise further as the job market normalizes, projections indicate that the numbers will stay "well within the norm." Examining specific sectors reveals unique dynamics. The health care industry, propelled by long-term structural factors, continues to add jobs, providing stability to the overall economy. Conversely, the retail trade sector experiences job losses despite strong sales, signaling the industry’s transition to online channels and COVID-related changes in retail behavior. Navigating this intricatelandscape requires keen insight into sector-specific trends and an awareness of the evolving dynamics shaping the broader economic trajectory. What I am watching: Following the positive November inflation and labor market reports, the Federal Reserve did not change interest rates at their December meeting. After the aggressive interest rate increases since March 2022, this is now the third consecutive meeting with no change, but the Fed indicated that there will be multiple rate cuts beginning in 2024 and beyond. One key to the economy will be how consumers approach holiday spending. With consumer confidence low and news of upcoming layoffs, people may tighten their belts, thereby slowing the economy. Download Report Download the latest version of the Commercial Pulse Report here. Better yet, subscribe so you'll get it in your inbox every time it releases, or once a month as you choose.

As new car production is finally nearing pre-pandemic levels, supply is catching up to demand. For many potential new car buyers that held off because of the tremendous mark-up on new and usedcars during the pandemic, the beginning trend of new car incentives and discounts is welcoming. However, the increase in car loan interest rates are eating up any incentives being offered, and those consumers who have patiently waited are actually worse off now than if they had purchased a car during the past couple of years. Many consumers did purchase cars during the pandemic, driven by necessity. During the pandemic, jobs were lost due to business shuts downs, and many were forced to seek new job opportunities. As remote work became the new normal and the demand for delivery of food and products skyrocketed, people purchased cars at marked up prices to employ themselves to meet this increasing demand. It turned out to be a good business decision as higher interest rates now make car purchasing an even more expensive experience. What I am watching: It will be interesting to see how quickly the automotive industry and car dealers increase the incentives to offset the increased cost of borrowing to purchase a car. After the aggressive interest rate increases by the Federal Reserve to combat inflation over the past 18 months, there is rumbling that the Fed will soon begin cutting rates. If interest rates come down and borrowing for auto loans is more reasonable, the increase in demand will be a welcome sight for the auto sector that finally was able to ramp up supply.

The aggressive interest rate hikes instituted by the Federal Reserve over the past year and a half may have achieved the desired goal. Easing inflation (3.2% in October) and strong GDP growth (4.9% in Q3) are some of the first indications that the economy may experience the “soft landing” hoped for instead of a recession. The consistently strong labor market produced low unemployment and increasing wages, enabling personal spending to increase. However, while spending continues to grow, the growth rate is on a downward trend. The high rate of spending has been driven by consumers digging into savings and borrowing more. As savings dwindle and the cost to borrow increases, it is likely that consumers will retreat and the pull-back will likely hit discretionary categories first. What I am watching: Heading into the holiday season, consumer spending is still strong but how long will it last? The National Retail Federation is projecting that November and December retail sales will grow 3-4% which is in line with the 3.6% average increase from 2010-2019 but lower than the past three years. People are already dipping into savings and borrowing more to continue their consumption but that well will run dry at some point. In addition, 36% of consumers cite December is a month for seasonal financial distress, according to PYMNTS. While consumers may continue spending through the holiday season, the tide may turn in early 2024 when bills hit with higher interest rates. Download Full Report Download the latest version of the Commercial Pulse Report here. Better yet, subscribe so you'll get it in your inbox every time it releases, or once a month as you choose.

Since the COVID-19 pandemic, the U.S. labor market has shifted. Compared to pre-pandemic levels, there are more people employed yet a lower labor force participation rate, higher quit rates and more job vacancies which results in a tight labor market. A tight labor market is empowering workers, and they are exercising that power in the form of worker strikes. In addition, new technologies such as in the auto industry and new business models such as streaming in the entertainment industry, are creating driving the need for employers to address changes to worker contracts. Inequality in the employer/employee relationship over the past few years has fueled worker unrest and they are now exercising their power in a demand for higher wages and benefits or a greater share in profits. 2023 is proving to be a landmark year in terms of the number of strikes as well as union elections. The result of these strikes has proven beneficial to workers with employees at major companies receiving significant increases in yearly compensation and benefits. Labor union participation rates have been declining since 1983 and reached historic lows in 2022, however, the number of workers represented by unions increased for the first time since 2017. The United States is experiencing a shift in states and unionization rates with some historically low union states experiencing significant growth. While unionization rates in total are decreasing across most industries, others are increasing their union efforts and demanding and achieving results. It is a challenging environment for employers and employees as inflation and high interest rates put pressure on the United States economy. As unionization rates have declined it has increased income inequality and lead to reductions in middle class income. This pressure on many employees in the United States has driven union approval rates to the highest levels since the mid 1960’s, with the majority of adults seeing the decrease in unions as a bad sign for the country and the labor force. What I am watching: The power and effectiveness of union walk-outs and strikes is being recognized in the United States workforce. Earlier this year, UPS and the International Brotherhood of Teamsters representing more than 300,000 UPS employees, negotiated and approved a new 5 year-contract with more than 86% support. The union’s president stated, “the contract was the most lucrative ever at UPS and would serve as a model for other workers.” The success of this effort has resonated in the economy with most notably the United Auto Workers staging walk-outs across multiple auto manufacturing plants which has resulted in a tentative contracts with the three Detroit automakers. The results of unionization are being recognized and union efforts are spreading across multiple industries. With employees realizing there is power in numbers it is anticipated that unionization rates will continue to grow as employees seek equal representation in the labor force. Download Full Report Download the latest version of the Commercial Pulse Report here. Better yet, subscribe so you'll get it in your inbox every time it releases, or once a month as you choose.

What do credit unions, community financial institutions, retailers, B2B companies, and manufacturers all have in common? They are a vital part of the small business ecosystem—which highly impacts the US economy—and have the power to enable small businesses with better rates, terms, and credit options. The rapid rise of small business creation during the pandemic and beyond has proven to be a promising growth opportunity for firms that influence the small business ecosystem, especially if the firms can address the high volume of new business accounts applying for new lines of credit and credit terms online. Unfortunately, many of these firms are facing a difficult dilemma in updating their operations to run efficiently enough to automate their existing credit approval processes in a way that can serve business customers digitally and in a timely manner before customers look elsewhere. It’s a difficult scenario for smaller firms to handle operationally, and at a time when markets are fickle: How do firms invest in automating and updating their own operations, like credit approvals, with minimal resources and fast? Usually, it takes a lot of investment, time, resources, and agility to automate manual processes across organizations in a way that is secure and efficient. This scenario often gives larger competitor firms who have the resources to build automation in-house an advantage in addressing the market for small businesses. Break new ground with ‘out of the box’ small business lending: Introducing Experian’s RapidLendTM Small Business Bundle Firms can create ‘blue sky’, or more opportunities for small businesses by providing faster credit decisions and customer experiences. Break new ground within the small business space by leveraging ‘out of the box’ decisioning solutions, like Experian’s RapidLend Small Business Bundle. When combined with Experian’s vast, blended consumer and business data sets, firms can implement or improve their digital application workflow within 24 hours by deploying online credit forms to automate digital information capture and processing of small business credit applications. Experian’s RapidLend Small Business Bundle: Empowering small businesses and growth with automated decisions Smaller players who want to automate their small business credit process or bring on small business solutions channels for the first time can now easily implement web-based decisioning and application processing software called the RapidLend Small Business Bundle. The bundle is designed to render instant business credit approvals via a robust decision engine within a 24-window and with minimal technical lift required. This is a game changer for firms that are often squeezed for technical resources or investment but expected to deliver high-touch customer experiences from all aspects of their brand interactions, whether the interactions are with consumers or businesses. Now, digital applications can be processed instantly, and risk can be managed more efficiently within the RapidLend Small Business platform. The platform allows for credit scorecards and credit policy rules to be easily configured to automate credit decisions, actions, and credit limits. Bringing on a solution like the RapidLend Small Business bundle can also further enable strategies that help define and identify risk via simple API integrations within internal and third-party systems to promote added workflow automation that further reduces risk and human error. The platform delivers consistent and reliable decisioning results and allows users to print policy documentation on-demand. A path for firms to break into the small business space or stay competitive if they already have a presence It is an exciting time for firms that can take advantage of the opportunity to increase their activities within their small business channels or break into the small business channels by bringing on new products and solutions. By leveraging ‘out of the box’ solutions for automating the credit processes for small business accounts, firms can focus on what they do best and innovate in a way that fits their brand or business models without losing momentum. Solutions like Experian’s RapidLend Small Business bundle are just some of the many ways that Experian looks to grow market share for clients by empowering small businesses to thrive. Click the button below to watch a demo of the RapidLend Small Business bundle. Watch RapidLend Bundle Demo

The perception of economic conditions among small business owners grows more pessimistic with the NFIB optimism index still well below the 49-year average and a persistent belief that access to borrowing is likely to get worse. With inflation coming in at 3.7%, still stubbornly above the Fed’s 2% target, it is possible there will be more rate hikes in the coming months, which will make the cost of borrowing even higher. At the same time, small businesses are facing higher financing costs, the cost of labor continues to increase as workers can demand higher wages as employers struggle to find qualified workers for all their open positions. Meanwhile, there are still many signs pointing to a strong economy despite these challenges. Unemployment is still very low by historical standards as noticed by employers trying to fill open positions. Consumer spending continues to be strong with retail sales experiencing their sixth month-over-month gain in a row. As for credit tightening, both businesses and lenders report tightening but it may not be as bad it seems. Regular borrowing by small businesses on a monthto-month basis has recovered to pre-pandemic levels suggesting that even as borrowing costs are higher, small businesses still do have access to credit. New term loans are showing the average loan amount increasing and the number of new originations is only down 3% from the last quarter. Revolving accounts are faring less favorably but are also more likely to have variable interest rates that are sensitive to the increase in Fed rates. What I am watching: The Fed will have a difficult decision to make about interest rates at their next meeting on November 1 and in the coming months. Inflation has come down dramatically from its peak, but progress has stalled in the last few months. Unemployment is still very low and consumer spending is strong, but consumer and small business optimism is down. Housing costs are very high and high interest rates have slowed home sales as the cost to enter is high and existing homeowners are reluctant to sell. All these mixed signals make the path forward to achieve the coveted soft landing difficult to navigate and different Fed chairpersons have indicated different ideas on the matter. How the economy continues to fair in the coming holiday season and the response of the Fed to those conditions will be very closely followed as a result.

Fall 2023 Beyond the Trends report out now As we delve into the latter part of 2023, it's evident that the market is undergoing significant shifts, a few of which we touch on in this post. Be sure to download your copy of the latest Beyond the Trends report. We’ll summarize a few of the highlights that stood out to us as the aisles of holiday merchandise drop into shopping carts, and the holiday season kicks off across the country. A word from the report’s author: Holiday Shopping: A Season of Hope Amidst Economic Challenges The holiday season is always a crucial period for retailers, and this year is no exception. U.S. spending trends have shown a positive trajectory in the last two months of the quarter, indicating a potential surge in holiday shopping. Retailers are expecting a sales increase of 3.5% to 4.6%, amounting to a whopping $1.54 to $1.56 trillion. This optimism is further bolstered by the fact that consumers have been consistently spending, despite challenges like high interest rates and rising debt payments. However, it's not all rosy. Factors such as inflation, high gasoline and food prices, and costlier apparel are anticipated to dampen consumer spending. Factory Orders: A Cooling Trend Businesses, wary of an impending recession, have reduced their ordering and are relying more on their current stocks, especially for the holiday season. This trend has a cascading effect on related industries. For instance, the reduced need for warehouse space due to lower restocking and new orders has impacted the commercial construction sector. Furthermore, if consumers are buying fewer items due to high pricing, it means fewer units need to be shipped, directly affecting the transportation industry. Logistic costs have been on a decline for the past year, impacting both major trucking companies and independent transporters. Inventory: A Strategic Approach Amidst Uncertainty With the looming threat of a recession, businesses are taking a more strategic approach to their inventory. The trend indicates a reliance on current stocks rather than placing new orders. This cautious approach reflects the broader economic sentiment. Retailers, in particular, are keenly observing consumer behaviors and making forecasts on how many items to stock in their shopping carts for the holiday season. Credit Markets Tightening: A Sign of Caution There's a discernible focus on the tightening of credit markets. Consumer and commercial credit scores are witnessing the repercussions of increased leveraging and slower repayment behaviors.This tightening could potentially lead to a downsized holiday shopping list for many. For small businesses, this could translate to reduced consumer spending power, affecting their cashflows. Businesses that have been thriving in a bullish market might need to reconsider their strategies, especially as they might face challenges accessing credit markets or private funding in a cooling market. The Senior Loan Officer Opinion survey further underscores this trend, highlighting a growing inclination among lenders to tighten lending criteria. In closing: As we approach the end of 2023, the market is in a state of flux. While the holiday season brings hope for retailers, the broader economic indicators suggest caution. Businesses are strategizing to navigate these uncertain times, and the decisions they make now will have long-term implications. As consumers, businesses, and policymakers grapple with these challenges, one thing is clear: adaptability and resilience will be the keys to thriving in this ever-evolving landscape. Download Beyond the Trends Fall 2023 Report

The labor market remains robust with low unemployment (3.8%) and 366K new jobs created in September. Job openings in the U.S. were 9.6MM as of the end of August, an increase of 690K or 5.8% since July. Retail sales in August had a month-over month increase for the fifth consecutive month. As we head into the holiday shopping season, despite headlines of large retailers struggling, the retail industry appears poised for success. It is likely that those retail businesses that survived the difficulties of the pandemic are the most financially sound and are driving the statistics. Over the past year, retailers are seeking less credit and taking on less debt than the previous few years. Despite inflation, consumers are still spending, and retailers are benefitting. Commercial delinquencies have been increasing over the past year. Delinquencies within the retail sector were trending above overall commercial delinquencies until just a few months ago when retailers exhibited lower rates than overall. These are all positive signs heading into the holiday shopping season which tends to make or break a retailer’s year. The September labor report was stronger than expected. Unemployment remained low at 3.8% and 366K new jobs were created which was the highest amount since January. In addition, the jobs created in July and August were revised upward significantly. What I am watching: With the labor market still tight, it will be interesting to see if the retail sector will be able to staff accordingly to support the holiday crunch. If staffing is difficult, retail stores may struggle to keep up with demand. Now that the student loan moratorium has ended, it will be important to monitor the impact to consumer spend. The increased expense of the student loan monthly payments will likely leave individuals with less discretionary income to spend on retail purchases. In addition, business owners who have student loans will have less money to invest in their business

In an era marked by rising interest rates, global supply chain disruptions, and transformative labor market shifts, B2B organizations are grappling with significant challenges to their commercial credit portfolios. Join us for a portfolio management webinar: WEBINAR DETAILS Get Ahead of Economic Aftershocks: Holistic Portfolio Management Principles Date: Thursday, October 12th, 2023 Time: 10:00 a.m. (Pacific) | 1:00 p.m. (Eastern) During this session, participants will learn how to: Better Anticipate the Economic Impact on Your Portfolio: Dive into proactive portfolio analysis techniques to stay ahead of economic uncertainties. Learn how to interpret subtle credit score changes and trends to preemptively address potential risks and adjust your strategies accordingly. Understand the Roadblocks to Automation: While automation is the gateway to efficiency and agility, many businesses face barriers in its adoption. We'll explore common challenges in transitioning from manual to automated processes, offering insights to help you leverage automation for improved decision-making. Fine-tune Your Collection Recovery Approach: Some accounts are inevitably bound to become liabilities. Discover how to optimize your collection and recovery strategy, using collection scores to assess recovery likelihood and tools like skip tracing for effective resource allocation. Why Attend? Gain a holistic understanding of the challenges and solutions in commercial credit risk. Equip your organization with actionable insights to enhance efficiency and resilience. Learn best practices from Experian experts relevant to real-world challenges. Don't miss this opportunity to elevate your B2B organization's credit risk management approach. Register now and steer your portfolio confidently through today's dynamic economic landscape. Save My Seat

The travel and leisure sector was one of the hardest hit industries during the pandemic. Now that most worldwide travel restrictions have been lifted, the industry is rebounding. It appears that travel businesses relied on more commercial credit to weather the storm of the pandemic and raised prices to help recover. While commercial credit delinquencies were higher during the pandemic, they have now eased across most of the travel industries indicating that maybe the worst is over for this sector. The August inflation report was generally positive news but did indicate some mixed results. Inflation (CPI) increased for the second consecutive month to 3.7% in August but core inflation, excluding food and energy, decreased in July to 4.3%, the lowest since September 2021. Annual producer price inflation (supplier prices) increased to 1.6% in August, up from in 0.8% July and is the highest sinceApril 2023. Although CPI is still above the Fed’s 2% target, they paused rate hikes at their September 20th meeting. However, they indicated that they may continueto raise rate at one of the remaining two meetings later this year. What I am watching: There are several high-profile news stories that could have an impact on the economy: If Congress does not pass a bill to fund the government by September 30, a government shutdown may lead to negative economic impacts. If the auto worker strike continues for a long time and auto production is diminished, some experts estimate that it will be a significant impact to the economy. The moratorium on student loan payments is set to expire on OctoberAs individuals begin paying their monthly loan payment, they will have less disposable income to spend on other things that fuel economic growth

The world of business is always percolating with new opportunities, especially with the recent surge in small business ventures. But with these fresh beans come some not-so-sweet flavors: the bitter taste of B2B fraud. It's time we ground out the details and brewed some solutions. ☕ Join us Thursday, September 28th at 10am for 15 delicious minutes. Mitigating Fraud in B2B Companies Date: Thursday, September 28th, 20233Time: 10:00 a.m. (Pacific) 1:00 p.m. (Eastern) Don't be latte to the game! Join us for a piping hot 15-minute Sip and Solve session where our very own Bonnie Gerrity will whisk you through the murky world of mitigating fraud for B2B accounts. This is not your regular espresso shot; it's a rich blend of data, industry trends and robust strategies. What’s Brewing? Operational Challenges and Unexplained LossesEvery business has its grinds. We'll discuss how to filter out common operational challenges leading to unexplained losses in B2B companies. Learn how to brew a smoother operational strategy. A Taste of Different Fraud TypesThere's a whole menu of fraud types affecting the B2B market. From the Americano-sized scams to the full Venti deceptions, we'll sip through each one. Layering Predictive ToolsA latte has layers, and so should your fraud prevention strategy. Discover how to layer highly predictive tools to ensure that service to your B2B accounts is as smooth and froth-free as your favorite coffee. Closing Sip: Experian's Blend for SuccessJust as every coffee lover has their preferred blend, Experian offers tailored commercial solutions to mitigate B2B fraud. Just like a well-brewed cup of coffee is essential to kick-start your day, a strong understanding and strategy against B2B fraud is vital for your business. Don't let fraud leave a bitter taste. Get equipped, stay informed, and ensure your business runs on the right kind of beans. Join our Sip and Solve session and let's roast fraud out of B2B. ☕🔍 Watch Recording