On Tuesday, Sept. 13, President Joe Biden hosted a celebration at the White House, acknowledging passage of the Inflation Reduction Act (IRA). In unfortunate timing, the celebration occurred just after the unveiling of somewhat dismal U.S. economic numbers and a rough day for the stock market.
While the Bureau of Labor Statistics reported slowing inflation for the second consecutive month, the Consumer Price Index showed goods costing 8.3% more last month than in August 2021. This triggered an immediate drop on Wall Street, its worst day since June 2020, according to The Guardian.
Meanwhile, President Biden downplayed the news during the IRA event. The president said “the stock market doesn’t necessarily reflect the state of the economy…unemployment is low, jobs are up, manufacturing is good. So, I think we’re gonna be fine,” Bloomberg reported.
However, this didn’t sit well with some investors. Many Americans took big hits to their 401(K) plans and retirement savings with Wall Street's disastrous day.
Assessing the President’s Delivery
So, was Biden too flippant? Was there something else he could have said? Several PR pros felt he could have handled the situation differently.
“It’s the president’s job to be reassuring, especially in the face of challenge,” says Adam Croglia, managing director, Trysail Strategies. “And as most of us commingle macroeconomic concepts, President Biden wants you to know the stock market is one of many indicators of economic strength.”
However, Croglia says, the IRA celebration's timing was inopportune.
“Celebrating while value is erased sends mixed messages to people counting on market strength and stability to retire.”
Heather Crowell, EVP, Gregory FCA, found the president's words slightly dismissive. In addition, they lacked an appreciation of the full picture.
For example, a falling market can result in reduced investment. “To the extent public companies' share prices remain depressed or overly volatile, they aren't positioned to reap the benefits of being public, raising efficient capital,” Crowell says. “Over the longer term, this could limit investment and overall economic growth."
Moreover, continued inflation is worrisome. "As costs rise across the spectrum, companies looking to cut costs could look at [labor]...potentially impacting the strong employment outlook.”
Market Fluctuation Responses
Several audiences come into play during a market downturn. Regardless of what the president says, brands must communicate important information to shareholders, from institutional investors to laptop warrior day traders looking to make extra money for their kids’ college fund.
Crowell believes communication is vital during volatile times.
“Regarding public companies and quelling investor concerns, to the extent the fundamentals of their business remain strong and un-impacted by potential rate hikes, they should reiterate these details and point to any guidance revisions they may have recently made to account for a volatile economic backdrop,” she says.
Croglia says education should remain a top communication priority, particularly at financial institutions.
“Leaning into moments like this is essential to build and maintain trust,” he says. “People need ongoing education, especially in pullbacks, to make the right decisions. Like most communication on critical issues, it comes down to trust. Institutions should always be in trust-building mode. Moments like this are where significant gains can be made, even when the market isn’t [rising].”
Any Good News?
There are winners and losers in most crises. So, it’s no surprise that several industries can take advantage of this volatile moment from a communication and connection standpoint.
Joe Anthony, president, Gregory FCA, says banks, financial advisors and insurance brands have an opportunity to promote their business as markets remain choppy.
“Banks have a great message: now is a great time to save/stash your money in the bank,” Anthony says. “Interest rates are favorable for savers."
The financial advising industry can supply certainty when investors may be unsure what to do next.
“This volatility and economic pressure underpin the value of having financial advice and a sherpa in this market is too good to pass up,” he says.
Those investors looking for a more conservative approach also can benefit from the outreach of insurance companies.
“Insurance companies have stepped up their marketing and PR around their guaranteed income products—the fear and greed pendulum has swung in favor of annuities and insurance (fear) and away from stocks and crypto (greed),” he says.
Nicole Schuman is a senior editor for PRNEWS. Follow her: @buffalogal