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U.S Trade Deficit Increased, Canada Sank to $476 M

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Offshore oil platform is seen in Huntington Beach

Automatic Data Processing (ADP) that estimates change in the number of employed people excluding the farming industry and government during the previous month shows companies in U.S added 185,000 workers for last month. Falling below expected 215,000 estimated by 44 economists surveyed by Bloomberg.

The figure was 44,000 short of June 229,000 data, though the number of jobs added came out short but analysts have attributed it to layoff in the energy industry and weaker employments in manufacturing due to drop in demand from overseas.

Mark Zandi, Chief economist at Moody’s Analytics Inc., said “job growth is strong but it has weakened since the beginning of the year, nevertheless even at this slower pace of growth the labour market is fast approaching full employment”.

U.S Trade Balance

U.S deficit increased from $41.9 billion to $43.8 billion in June, the largest in three months.  The increase in deficit was as a result of strong dollar that hobbled export demand but increase import. The Commerce Department data shows that the gap grew by 7.1 percent.

The strong dollar makes American goods somewhat expensive for oversea buyers and prevent the economy from gaining sustainable momentum.

According to Richard Moody, chief economist at Regions Financial Corp., exports are hurting from combination of stronger U.S dollar and soft global growth.

Canada Trade Balance

Canada trade balance sank to $476 million, after five consecutive declines. Analysts had earlier estimated $2.8 billion but the data was better than economist estimates, as exports increased imports fell compared with the previous month.

The trade deficit was far less than the $3.3 billion recorded in May, while the value of merchandise exports in June were up by 6.3 per cent. Exports to the United States rose 7.1 per cent to $34.2 billion in June, while exports to other countries increased by 3.8 per cent to $10.4 billion.

Exports raised in nine of 11 sections, led by consumer goods as well as metal and non-metallic mineral products. Exports excluding energy products were up 6.9 per cent in June.

Imports declined to $45.1 billion in June, as seven of 11 sections decreased. Imports from the United States declined 0.9 per cent to $29.5 billion.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

Prepaid Meter is Free, Buhari Warns DisCos, Agents

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prepaid meter

President Muhammadu Buhari once again warned Power Distributing Companies (DisCos) and their agents selling prepaid meters to electricity customers against the Federal Government directive that meter is free.

Ahmed Rufai Zakar, the Special Adviser to the President on Infrastructure, who represented Buhari at the FGN/NLC-TUC ad-hoc committee on electricity tariff stakeholders held in Ibadan, Oyo State on Wednesday, said President Buhari understood people’s concerns on issues surrounding electricity and was determined to curb and deal with unscrupulous individuals in the power sector.

He said, “We have made it very clear through the regulators direct order as well as intervention from the Ministry of Power that the meters are to be provided to Nigerians at no cost.

“Even for meters that were paid for, there is the directive from the regulator to the discos that they would need to find a way to reimburse those citizens over time.

“In cases where we find any disco or disco representative selling the meters or exploiting Nigerians to be able to get meters by paying, we would take the full measures of the law.

“The President has mandated that these meters must be free. We have also said that they must come from local manufacturers.

“This would create jobs and revive our industry.”

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Economy

Nigeria’s Real Estate Sector Shrinks by 8.06% in the Third Quarter -NBS

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Economic uncertainty plunged Nigeria’s real estate sector by 8.06 percent in the third quarter of the year, according to the National Bureau of Statistics (NBS).

Nigeria’s statistics office said “In nominal terms, real estate services recorded a growth rate of –8.06 per cent in the third quarter of 2020, indicating a decline of –11.78 per cent points compared to the growth rate at the same period in 2019, and by 9.12 per cent points when compared to the preceding quarter.

“Quarter-on-quarter, the sector growth rate was 18.92 per cent.

“Real GDP growth recorded in the sector in Q3 2020 stood at -13.40 per cent, lower than the growth recorded in third quarter of 2019 by –11.09 per cent points, but higher relative to Q2 2020 by 8.59 per cent points.

“Quarter-on-quarter, the sector grew by 17.15 per cent in the third quarter of 2020.

“It contributed 5.58 per cent to real GDP in Q3, 2020, lower than the 6.21 per cent it recorded in the corresponding quarter of 2019.”

Nigeria’s economy contracted by 2.48 percent in the first nine months following a 6.10 percent and 3.62 percent contraction in the second and third quarters respectively.

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Economy

Nigeria Requires N400 Billion Annually to Maintain Federal Roads -Senator Bassey

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lekki

The Chairman of the Senate Committee on road maintenance, Senator Gersome Bassey, on Friday said Nigeria requires about N400 billion annually to maintain federal roads across the country.

The Senator, therefore, described the N38 billion budgeted for road repairs in the 2021 proposed Budget as grossly inadequate. According to him, nothing meaningful could be achieved by the Federal Roads Maintenance Agency (FERMA) with such an amount.

He said, “For the 35 kilometres federal roads in the country to be motorable at all times, the sum of N400bn is required on yearly basis for maintenance.”

Bassey “What the committee submitted to the Appropriation Committee in the 2021 fiscal year is the N38bn proposed for it by the executive which cannot cover up to one quarter of the entire length of deplorable roads in the country.

“Unfortunately, despite having the power of appropriation, we cannot as a committee jerk up the sum since we are not in a position to carry out the estimation of work to be done on each of the specific portion of the road.

“Doing that without proposals to that effect from the executive, may lead to project insertion or padding as often alleged in the media.”

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