NEW YORK (TheStreet) - Jobs surged the most in two years as the U.S. unemployment rate fell to a 5-year low earlier in May, while data shows aggregate Chinese gross domestic product (GDP) is poised to surpass the U.S.
Neither of these recent headlines may be the major business stories to watch for the rest of 2014.
The second half of 2014 will not only be a midterm election in key Senate, Congress and gubernatorial races, it may also prove a turning point for many issues that have loomed large over ordinary workers and retirees, corporate C-Suites and the economic priorities of the United States.
This contrasts to recent years, when a few giant business stories set the tone for the year. After a near-default of the U.S. government in 2011 and the creation of a spending sequester, the following year hinged on a decisive presidential election that ultimately caused Congress to avoid similar standoffs in 2013.
Stock markets surged in 2013, amid improving U.S. economic data, prompting the Federal Reserve to change its tone on its emergency post-crisis easing efforts. A pullback of the Fed's bond buying began in the winter of 2013. Months earlier, the Central Bank's change in tone may have ultimately focused many home-owners and home-buyers on making a move before the Fed began hiking rates.
Housing market activity, unsurprisingly, surged and then tumbled within a span of a few quarters.
In the wake of those major stories of yesteryear, however, lie long-festering issues that will significantly impact the business environment and which may become the focus of lawmakers, voters and corporate C-suites for the remainder or 2014.
Here are TheStreet's 5 Business Stories for the rest of 2014.
No, Your Wireless and Cable Bills Aren't Going to Surge
Despite what you read in newspapers and on blogs, expect your wireless, cable and internet service to improve as prices fall, whether you are a subscriber to Comcast (CMCSA), Verizon (VZ), AT&T (T), T-Mobile (TMUS), Sprint (S), or Time Warner Cable (TWC).
An epic consolidation of the telecom and cable industries could run its course in 2014, if Comcast is able to buy Time Warner Cable, if Sprint unveils a bid for T-Mobile and if DirecTV (DTV) is acquired by either AT&T or Dish Network (DISH).
Any of these deals are likely to be deemed anti-competitive; however, the threat to consumers and their pocketbooks may prove overstated.
Service is improving in the U.S. wireless and broadband industry. Meanwhile, there is an explosion of ways in which ordinary American can now view media content. Put simply, it is a renaissance for media.
But despite the threat of consolidation, prices may not rise or become the boogeyman that many believe will be the result of mega-mergers. It appears consolidation is more about building scale, improving corporate balance sheets and adding service offerings to consumers. Meanwhile, data points are beginning to show clear evidence of falling prices, especially in wireless data plans.
The Affordable Care Act (ACA) - otherwise known as Obamacare - may go the way of Medicaid and Medicare. By that, I mean to say the law may simply become an entrenched part of the U.S. healthcare system that has its critics but isn't a major topic of discussion.
Businesses, the media and many Americans may have rumbled about Obamacare and even made it a priority of recent election cycles; however, those concerns may be receding. The majority of private U.S. companies are in compliance with Obamacare even though some requirements have been delayed until 2015, global consultancy PwC reported in July Trendsetter report. Meanwhile, Obamacare's impact on company decision making may be minimal.
Just 3% of companies expect to drop healthcare coverage as a result of Obamacare, PwC said in July. Ken Esch, who led the Trendsetter report, said in a telephone interview Wednesday that companies may have found their employee plans required little change as Obamacare was implemented. Meanwhile, a recovering labor market may have meant employers decided against changes to their healthcare plans, fearing a loss of talent to competitors.
Signups for Obamacare surpassed 8 million, the government reported earlier in May. Meanwhile, threats to the policy like a bad age mix of signups or payment defaults, don't appear to have been borne out.
By year-end, Obamacare may simply become a part of the way America does business.
A Surprise In Congress
It's often said the performance of Republicans in the 2010 midterm elections solidified a partisan split in Washington and paved the way for standoffs over the national debt, government spending and President Obama's agenda. Those 2010 gains were generally attributable to voter disquiet over Obamacare.
Four years later, it is unlikely Obamacare plays such a major role in this midterm election cycle. In fact, if midterm elections don't create decisive gains for Republicans in the Senate, and even swing in Democrats favor in the House of Representatives, it might pave the way for a revived policy agenda.
President Obama, in concert with his own party, appears to be trying to change the tide of midterm elections by pressing for a hike of the federal minimum wage to $10.10 an hour. If that strategy works, it could help the President re-focus domestically and upon economic policy targeted at the middle class. A bad midterm could also solidify President Obama's status as a lame duck, as parties prepare for 2016 elections.
Investors' Say on Pay
As investors might have noticed, 2014 is shaping up to be a tougher year in stock markets than 2013, when both the Dow Jones Industrial Average and the S&P 500 Index surged to post-crisis highs.
Choppy stock markets and the prospect of a market pull back may bring some issues, for instance executive pay, to the forefront of discussion. Investors now have a so-called "say on pay," meaning they can vote in favor, abstain, or vote against executive compensation packages.
During the financial crisis, executive pay did not fall as sharply as stocks and in the years since the crisis, pay has risen significantly. With stock gains likely more muted and harder to come by in the fifth year of recovery from the crisis, shareholders may soon exercise their voice in executive compensation. In fact, they already are.
Warren Buffett recently called Coca-Cola's (KO) executive pay package "egregious" and abstained from voting for it. Carl Icahn, an activist investor, criticized Buffett for not voting against the package. Money managers such as Blackrock (BLK), CalPERS and T. Rowe Price have vowed to be more active voters.
Investors have a say on executive pay. Prepare to hear it.
Welcome Back to America
Pfizer (PFE) raised more than a few eyebrows when the New York based pharmaceuticals giant announced a deal to buy AstraZeneca (AZN) and invert its corporate home to the United Kingdom, which has a lower corporate tax rate.
While the move would be the first for a Down Jones Industrial Average conglomerate, it isn't a shock. Pharmaceutical giants have been moving to low-tax jurisdictions in droves through complex merger activity, and it is possible such tax-related strategies spread to other sectors.
However, if companies as prominent as Pfizer begin to try and shift their jurisdiction abroad, it might focus Washington on corporate tax reform. A more equitable U.S. and international tax system is a major topic of discussion in C-suites and on Wall Street but nothing has been done about it for years. At some point, Washington may react. Pfizer could be a turning point.
Taxes are one of the biggest stories facing U.S. corporations, which hold trillions of dollars in foreign profits abroad. A repatriation of those profits, instead of inversions to access them could drive a renaissance of corporate investment in the U.S.
-- Written by Antoine Gara in New York