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US Retail Sales Rise More Than Forecast

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retail sales

US consumers are spending again as retail sales number shows consumers bought automobiles and a range of other goods in May, suggesting the economy is gaining steam despite slowdown in the labor market.

Retail sales rose 0.5 percent in May, follow a 1.3 percent jump in April, Commerce Department figures showed on Tuesday in Washington.

“This is a very strong spring quarter for consumer spending,” said Stuart Hoffman, chief economist at PNC Financial Services Group Inc. in Pittsburgh and the best forecaster of retail sales over the past two years, according to data compiled by Bloomberg. It adds to evidence that the economy “is bouncing back pretty solidly.”

Steady gains in consumption will help the economy accelerate from a soft patch at the start of the year, bolstering forecasts by Federal Reserve officials that the slowdown would prove temporary. A pickup in wages generated by continued increases in employment will help ensure households remain a mainstay of the economic expansion.

Broad-based Gain

Nine of 13 major categories showed increases in demand in May from the prior month, led by a 1.3 percent jump at non-store retailers, which include online merchants. Sales also rose 1.3 percent at sporting goods stores and 0.8 percent at clothing stores, marking the biggest advance since November.

Automobile dealers’ sales increased 0.5 percent in May after a jumping 3.1 percent the prior month. That’s roughly in line with figures earlier this month that showed U.S. vehicle sales were little changed in May from the month before.

Receipts at gasoline stations climbed 2.1 percent last month, the retail sales report showed. The Commerce Department’s retail sales data aren’t adjusted for prices, so higher fuel costs can boost filling-station receipts. The cost of an average gallon of regular gasoline was $2.38 as of June 10, the highest level since September.

The figures used to calculate gross domestic product, which exclude categories such as food services, auto dealers, home-improvement stores and service stations, increased 0.4 percent in May after rising 1 percent the month before, which was the biggest advance in two years.

Growth Forecasts

Economists are counting on households to lead a rebound in the U.S. after first quarter growth was hamstrung by slowing consumption growth and a slump in business investment. Analysts surveyed by Bloomberg from June 3 to June 8 saw growth climbing at a 2.5 percent annualized rate in the second quarter after a 0.8 percent pace in the first three months of the year.

Fed policy makers are keeping tabs on growth as they determine when their next interest-rate increase will be appropriate. May’s weak payrolls report led many economists to conclude that a hike at the Fed’s June meeting, taking place Tuesday and Wednesday, would be unlikely.

Another report Tuesday showed inflation was starting to stir. The costs of goods imported into the U.S. climbed 1.4 percent in May, the biggest gain in four years, according to data from the Labor Department.

While the advance was paced by a 16.2 percent surge in fuel costs that was the largest since 1999, prices for other items were also starting to strengthen. Non-fuel imports cost 0.3 percent more last month, the biggest gain since March 2014.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Nigeria’s Paper Import Bill Hits $3 Billion Annually, Reveals FAE Limited MD

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Funlayo Okeowo, the Managing Director of FAE Limited, a prominent paper manufacturing firm, has disclosed that Nigeria’s annual expenditure on paper imports stands at $3 billion.

Okeowo made this revelation during a recent press conference held in Lagos to commemorate the company’s 50th anniversary.

Addressing reporters, Okeowo explained the crucial role of manufacturing in driving economic growth and underscored the challenges faced by the sector, particularly concerning operational costs.

She highlighted that a significant portion of manufacturers’ profits, up to 80%, is being consumed by diesel expenses, making it increasingly difficult for businesses to remain profitable.

Expressing concern over the financial strain faced by manufacturers, Okeowo called upon the government to take decisive action to alleviate the burdens faced by the industry.

She emphasized the need for policies and interventions aimed at reducing operational costs and fostering a conducive environment for manufacturing growth.

In addition to addressing the pressing issues surrounding manufacturing, Okeowo also unveiled plans for the establishment of ‘World Envelopes Day,’ an initiative aimed at raising awareness about the significance of envelopes in various aspects of human communication and expression.

The initiative, set to be celebrated annually on April 16th, reflects FAE Limited’s commitment to promoting the cultural and practical importance of envelopes in society.

As part of the company’s anniversary celebrations, FAE Limited will host a special roundtable event featuring key stakeholders from diverse sectors to discuss the past, present, and future of the paper manufacturing industry in Nigeria.

This event is expected to provide valuable insights and recommendations for driving

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Economist Intelligence Unit Warns Indigenous Oil Companies of Investment Gap

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Oil

The Economist Intelligence Unit (EIU) has issued a cautionary note to indigenous oil companies eyeing the acquisition of assets from divesting international oil companies, warning them of potential investment challenges.

In its latest Country Report on Nigeria, the EIU underscored that local companies may not match the financial prowess of multinational firms, historically significant players in Nigeria’s oil industry.

Citing concerns over Nigeria’s business environment, characterized by corruption, insecurity, and infrastructure deficits, the EIU projected a possible net withdrawal of foreign direct investment (FDI) in 2024, following a similar trend observed in the previous year.

The report pointed to multinational corporations scaling back or exiting Nigeria altogether, exacerbating the economic landscape’s challenges.

Foreign oil companies, including Shell, ExxonMobil, Equinor, and TotalEnergies, have announced plans to divest their onshore oil assets, signaling a shift toward offshore operations.

This trend aligns with the broader industry shift and poses significant implications for indigenous players.

While government officials like the Minister of State for Petroleum, Heineken Lokpobiri, view these divestments as opportunities for local capacity development, concerns remain over indigenous firms’ ability to fill the investment void left by departing multinationals.

The EIU emphasized the positive potential for local participation in the sector’s indigenization, but cautioned that indigenous companies might struggle to match outgoing multinationals’ investment capabilities.

This warning underscores the imperative for strategic planning and support mechanisms to ensure indigenous firms can navigate the evolving landscape and contribute meaningfully to Nigeria’s oil industry sustainability.

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Heirs Technology Appoints Obong Idiong as Chief Executive Officer (CEO)

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Obong-Idiong

Heirs Technology, the latest subsidiary of investment powerhouse Heirs Holdings, has announced the appointment of Obong Idiong as its Chief Executive Officer (CEO).

This move marks a significant step in the company’s mission to spearhead Africa’s digital transformation through innovative and locally tailored solutions.

Idiong, who previously served as the Managing Director/CEO at Africa Prudential Plc, brings a wealth of experience and a visionary approach to his new role.

During his tenure at Africa Prudential Plc, he led the digital transformation of its registrar services, positioning the company as a technology-driven organization.

His track record of success and expertise in the technology sector make him well-suited to lead Heirs Technology into a new era of growth and innovation.

In his statement following the appointment, Idiong expressed pride in bringing Heirs Holdings’ core values and business approach to the tech sector.

He highlighted the company’s commitment to excellence, execution, and enterprise, aiming to bridge the gap in the technology ecosystem by delivering local relevance to a global market and offering cutting-edge solutions to enhance competitiveness.

Also, Dr. Fumbi Chima has been appointed as the Chair of Heirs Technology. With her extensive experience in technology leadership roles across global organizations, including Adidas, Fox Network Group, and Walmart, Chima brings a wealth of knowledge and insights to her new role.

She expressed enthusiasm for the opportunity to unlock Africa’s potential through Heirs Technology, confident that the company will make a meaningful impact on the continent’s digital landscape.

Heirs Technology’s strategic appointments underscore its commitment to driving Africa’s digital agenda forward and positioning the continent as a leader in technology innovation and entrepreneurship.

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