Treasury
ISM: US service sector expansion in January fastest since October 2024
The ISM reported on Wednesday that US service sector activity expanded in January for a second consecutive month at the fastest pace since October 2024, with the composite index rising for 19 consecutive months. Business activity accelerated, while growth in new orders and employment slowed. The manufacturing PMI also rose to its highest since August 2022. Federal Reserve officials emphasized economic resilience, but tariff uncertainty remains a risk.
Missouri Proposes Abolishing Personal Income Tax: Pros and Cons for Businesses?
Missouri Governor Mike Kehoe proposed tax reform in his State of the State address on January 13, advocating for the abolition of the personal income tax and the expansion of the sales tax to include digital services. Experts at the Tax Foundation analyze that while this move could help attract talent and reduce tax burdens for sole proprietorships, it may increase compliance costs for local small and medium-sized businesses and suppress consumption due to tax shifting. Georgia is also considering similar measures, while more states are opting to lower tax rates or move toward a flat tax in 2026.
Costco lawsuit sparks tariff refund anxiety, but it is not the only remedy
Costco sued the Trump administration last month, seeking a declaration that tariffs imposed under the International Emergency Economic Powers Act of 1977 are illegal and a full refund of taxes paid, sparking anxiety among the business community to follow suit. Doreen M. Edelman, a partner at Lowenstein Sandler, noted that litigation is just one of several strategies to protect refund rights, and companies should prioritize the timing of goods liquidation before deciding whether to sue, apply for extensions, or wait for a Supreme Court ruling.
AICPA Urges IRS to Provide Employer Protective Safe Harbor Rules for Tip and Overtime Deductions
In a letter to the Internal Revenue Service (IRS) on Friday, the American Institute of CPAs (AICPA) requested additional guidance and "safe harbor" protections for employers and employees regarding tip and overtime reporting to ensure eligibility for tax deductions temporarily allowed under the One Big Beautiful Bill Act. The letter, signed by AICPA Tax Executive Committee Chair Cheri Freeh, noted that despite the IRS issuing new regulations last month, uncertainties remain regarding implementation details.
Robert Half: Senior CFO New Position Annual Salary May Reach $321,700
Robert Half's latest salary guide predicts that the average salary for new CFO positions in the United States in 2026 will increase by 0.6% year-over-year to $269,750, with senior CFOs earning up to $321,750 annually. Overall salary increases for finance and accounting roles are expected to be 2.1%, slightly below the August inflation rate.
US-China tariff war cools, consumer pessimism eases
The Conference Board said on Tuesday that as the US-China tariff war cooled, American consumers' pessimism about the future eased in May after rising for five consecutive months. The Consumer Confidence Index rose 12.3 points this month to 98, and the Expectations Index also climbed significantly, though it remained below levels that typically indicate sustained economic growth rather than a recession.
S&P Global Survey: US Output Rebounds After US-China Tariff Easing
The S&P Global May survey shows that the US-China tariff pause agreement boosted US output, but business activity and expectations remain suppressed by tariff concerns, with price increases hitting a nearly three-year high. Economists warn the recovery may be short-lived, with EY-Parthenon expecting slower economic growth and a reduced recession risk of 35%.
Study: Invoice Rejection Rate Soars, May Serve as Financial Buffer for Companies Coping with Tariffs
The latest analysis by Finnish financial automation company Basware shows that the global corporate invoice rejection rate surged to 6.95% in the first quarter of 2025, up from 1.86% in the same period last year. The study, covering 272 million invoices, finds that the rise in rejection rates coincides with the timing of trade tensions caused by U.S. tariff policies, and that companies may be using delayed payments as a buffer against economic uncertainty.
Surge in Federal Debt to Raise Borrowing Costs and Erode Investment: Peterson Foundation Warns
The Peter G. Peterson Foundation released an analysis Monday stating that under current law, the surge in federal debt over the next decade will raise borrowing costs, reduce private investment by 13.6%, and shrink the economy by $340 billion. The projection does not account for proposed spending increases and tax cut extensions by the Trump administration and Republican lawmakers; if these policies are implemented, deficits and debt would be significantly higher than current forecasts.
Tariff concerns push one-year inflation expectations to 7.3%, a multi-decade high
A University of Michigan survey shows that U.S. consumers' one-year inflation expectations surged to 7.3% this month, a multi-decade high, mainly due to concerns that the Trump administration's tariff policies will push up prices. Consumer confidence has fallen nearly 30% since January, and Republicans' confidence index also dropped 7% in May. Although hard data show moderate inflation and a solid job market, trade policy uncertainty continues to dominate consumer expectations.