Good morning. The economy had a strong quarter. Your costs had a stronger one. Diesel is up $2.634 a gallon from a year ago, a new tariff list went live at midnight, and health insurance renewals are starting to land. None of it shows up in your books until next month. Most owners can't just raise prices to cover it. They don't have to. The money is usually already inside the business, leaking out somewhere nobody measures.
Canada's 50% tariff list changed overnight.
100 in / 22 out products on the 50% list
What happened. Signed Oct. 23, live this morning. The list of Canadian products paying the extra 50% grew from 513 lines to 591. It stacks on steel and aluminum duties and applies even when goods qualify under USMCA.
Now on the list.
- Acrylic and vinyl paints and varnishes
- Putty, caulk and mastics
- Shampoo and toilet soap
- Lubricants and waxes
- Sweetened cocoa powder
Now off the list.
- Corrugated cartons and boxes
- Polyethylene sacks and bags
- Plastic boxes and crates
- Thin hardwood plywood
- Packing and labeling machinery
Who it hits. Painters, flooring and finishing contractors, facilities and maintenance, salons and janitorial, bakeries and food makers. The relief side helps packagers and shippers.
What you lose if you do nothing. Canadian acrylic and vinyl paint goes from 13.6% total duty to 63.6%. Illustration: a $10,000 order now carries $6,360 in duty instead of $1,360. If the quote was signed last month, that $5,000 comes out of your profit, not your customer's.
Where it leaks. Material. The cost lands over the estimate, nobody assigns it to the job, and it disappears into the month.
Measure. Pull 90 days of purchases that came from Canada, item by item.
Manage. Ask each supplier in writing which of your items moved and when the new price starts.
Fix. Move the next order to a source or product that is not on the list, and put a material escalation clause in every open quote.
The return. Every $10,000 of material you move off the list keeps up to $5,000 in duty inside your business.
Sources: The White House, proclamation, Oct. 23, 2026, Gateway Lines Tariff Radar, BDO, Oct. 29, 2026. Figures marked Illustration are worked math on a sample business.
The economy grew 3.4%. Prices grew 3.6%.
3.6% inflation, year over year
What happened. The economy grew at a 3.4% annual rate from July through September, up from 2.2% in the spring. The same morning, the Fed's preferred inflation gauge came in at 3.6% for the year ending in September. Core prices rose 3.1%.
- 3.4% GDP growth, third quarter
- 2.2% GDP growth, second quarter
- 3.6% PCE inflation, September
- 3.1% Core PCE inflation
Who it hits. Every business that sells from a price sheet, a menu or a rate card. Contractors, distributors, manufacturers, restaurants, service companies.
What you lose if you do nothing. Busy is not profitable. A growing economy fills your schedule while rising costs drain the margin on every job in it. Illustration: on $1,000,000 of annual costs, 3.6% is $36,000. If your prices cannot move, that $36,000 has to come from somewhere inside the business.
Where it leaks. Overhead nobody tests for a return. Drift of 3% to 6% of revenue a year is common, and it compounds every year it goes unexamined.
Measure. Compare your top 10 costs today against the same 10 a year ago.
Manage. Put one date on the calendar every month to check cost against what it returns.
Fix. Before you touch price, go line by line on overhead and cut what earns nothing.
The return. Finding $36,000 of overhead that earns nothing protects the same profit a price increase would, without asking a single customer.
Sources: BEA, GDP advance estimate, Oct. 29, 2026, CNBC, PCE inflation, Oct. 29, 2026. Figures marked Illustration are worked math on a sample business. Leak benchmarks: The Seven Leaks.
The Fed held rates at 3.75% to 4%. Two voters wanted a hike.
10 to 2 the vote to hold
What happened. The Fed kept its benchmark rate where it has been since September's quarter point increase. Its statement says inflation “remains elevated.” Governor Lisa Cook and Cleveland Fed President Beth Hammack wanted another quarter point. The next meeting is Dec. 9 and 10.
- 3.75% to 4% Federal funds target range
- 4.0% Primary credit rate
- 8.2% Average small business short-term loan rate, Sept.
- Dec. 9 and 10 Next meeting
Who it hits. Anyone carrying a line of credit, equipment notes, floor plan or construction draws. Dealers, contractors, manufacturers, real estate.
What you lose if you do nothing. A hold is not a refund. September's increase is still in your variable payment. Illustration: on a $1,000,000 variable balance, one quarter point is $2,500 a year, every year it stays.
Where it leaks. Debt service. The P&L only shows the interest. The principal still comes out of after-tax profit, and it often takes about $1.30 of pretax profit to cover every $1.00 of it.
Measure. List every variable rate payment. Write August's amount next to this month's.
Manage. Budget next month on today's payment, not the one you hope for.
Fix. Point freed-up cash at the most expensive variable balance first, and talk to your banker before Dec. 9.
The return. Paying down $100,000 on a line at 8.2% keeps about $8,200 a year that used to go to the bank.
Sources: Federal Reserve statement, Oct. 28, 2026, CNBC, Oct. 28, 2026, NFIB, September 2026. Figures marked Illustration are worked math on a sample business. Leak benchmarks: The Seven Leaks.
Diesel hit $6.352 a gallon this week.
+$2.634 per gallon vs. a year ago
What happened. The national on-highway diesel average rose 8 cents in one week, according to Energy Information Administration data released Monday. The Midwest jumped 13 cents to $6.480. The West Coast sits at $7.329.
- $6.352 National diesel average
- $6.480 Midwest, up 13 cents
- $7.329 West Coast
- $4.269 National gasoline
Who it hits. Trucking, distribution, construction, landscaping, HVAC, plumbing and electrical service, agriculture, delivery.
What you lose if you do nothing. Illustration: one truck at 500 miles a week and 8 miles per gallon burns 62.5 gallons. At $2.634 more per gallon, that is about $165 a week, or $8,561 a year, per truck. Ten trucks: $85,610.
Where it leaks. Labor. The miles nobody bills carry a paid driver, a paid crew and a $6 gallon. Drive time is the most expensive hour you do not charge for.
Measure. Fuel cost per truck per day, and hours paid against hours billed, this October against last.
Manage. Put a fuel line on every invoice that leaves the building.
Fix. Tighten routes and cut one unbilled trip per truck per day.
The return. Cutting 50 unbilled miles a week per truck saves about $2,064 a year in fuel alone, per truck, before you count the labor riding along.
Sources: EIA data via FleetOwner, Oct. 27, 2026. Figures marked Illustration are worked math on a sample business.
Consumer confidence jumped 7.5 points to 91.7.
91.7 highest since June
What happened. The Conference Board's index beat expectations, helped by gas prices easing from September to October. Same survey, different story: consumers plan to spend less on services and big-ticket goods over the next six months, and they are still frustrated with rising costs.
Who it hits. Restaurants, retail, home services, remodelers, auto, furniture and appliance dealers.
What you lose if you do nothing. A better mood is not a bigger ticket. Illustration: 1,000 jobs a year at $2,000 each. A ticket that shrinks 5% costs you $100,000 in sales, and you will not see it in one month. You will see it in three.
Where it leaks. The office. Estimates that sit, follow ups that never happen and quotes nobody tracks. That is a seat with a job and no standard.
Measure. Leads, close rate and average ticket this month against October last year.
Manage. Track close rate every week, not at month end.
Fix. Work the quotes you already have before you buy more leads. Every open estimate is a sale you already paid to produce.
The return. Lifting close rate from 30% to 33% on 1,000 quotes at $2,000 is 30 more jobs and $60,000 in sales, without spending another dollar on marketing.
Sources: The Conference Board, Oct. 27, 2026, Econoday via CME Group. Figures marked Illustration are worked math on a sample business.
Michigan approved 9.6% average small group health increases for 2027.
9.6% average increase, effective Jan. 1
What happened. Regulators approved the increases for plans covering businesses under 51 employees, about 403,722 people. The biggest was 14.8%. Nationally, the median small business premium hit $8,743 per employee in 2026, up 31% since 2022.
Illustration: a 20 person shop.
- Covered employees: 20
- Premium per employee: $8,743
- Annual premium today: $174,860
- 9.6% increase: $16,787 a year
Who it hits. Every employer under 51 people that offers coverage. Labor heavy shops feel it first: trades, practices, restaurants, manufacturing.
What you lose if you do nothing. That $16,787 a year starts in January whether your sales moved or not. Michigan is the filing that landed this week. Every state's filings are public.
Where it leaks. Labor. You pay benefits on every paid hour, not every billed hour. The lower your billed hours, the more each billed hour has to carry.
Measure. Get your renewal number in writing now, and measure billed hours against paid hours.
Manage. Put the new premium in next month's budget so January is not a surprise.
Fix. Shop the renewal before December, and raise billed hours so the premium spreads across more billed work.
The return. Illustration: 20 people at 2,080 paid hours each. Moving billed hours from 70% to 75% of paid is 2,080 more billed hours on the same payroll and the same premium.
Sources: The Detroit News, Oct. 28, 2026, Insurance Business, Gusto data. Figures marked Illustration are worked math on a sample business.
Quick Hits
Five more headlines worth a minute.
Jobless claims fell to 194,000, near 57-year lows.
Who it hits. Every employer trying to hire. Trades, healthcare, hospitality, manufacturing.
The move. Finding people stays hard. Before you add a seat, measure what the seats you already pay are producing.
60% of owners lose nearly a full workweek every month managing cash flow.
Who it hits. Owner-operators who still run the books, the bank and the bills themselves. A Grasshopper survey found 27% lose 15 days or more.
The move. Your hour is the most expensive one in the building. Put a number on it, then decide what you stop doing.
178 China product exclusions expire Nov. 10 unless extended.
Who it hits. Importers, distributors and manufacturers buying from China. The same date restarts a 100% duty on Chinese intermodal chassis.
The move. Check every China-sourced item against the exclusion list now. After Nov. 10, the duty lands on the next entry.
Source: Gateway Lines Tariff Radar.
SBA buyers must now show $1.25 of earnings for every $1.00 of loan payments.
Who it hits. Owners planning to sell to a buyer using SBA financing. Earnings must be actual results, not forecasts.
The move. Your buyer's loan is now sized on your real numbers. Clean books are worth money at the closing table.
Source: SelfEmployed, SBA SOP 50 10 8.1.
Merchants pay 2% to 3% on every credit card sale, and about a third of small businesses surcharge.
Who it hits. Restaurants, retail, home services, anyone taking cards at the counter or in the field.
The move. Illustration: $2,000,000 in card sales at 2.5% is $50,000 a year. Know the number before you decide who pays it.
Source: Straight Arrow News, Oct. 28, 2026.
Does your profit cover next month?
Your accountant will tell you what this week cost you. In about 45 days. The owners who measure it this week get to act on it.
The number that answers the question has a name: Minimum Mandatory Profit. It is the profit your business has to make next month to cover its debt, its obligations and you. Debt service is where it starts. It is not where it ends.
Raise the price if the market lets you. If it doesn't, find the leak: hours paid and never billed, material nobody assigned to a job, overhead nobody tested, quotes nobody followed up.
The news opens the door. It never proves what is happening inside your company. Only your own numbers do. Every edition of The JBA Report.