The world’s largest economy grew less than previously reported in the second quarter, a sign consumer spending will need to continue to drive expansion, Commerce Department figures showed Friday in Washington.
- Gross domestic product, the value of all goods and services produced, rose at a 1.1 percent annualized rate, revised down from an initial estimate of 1.2 percent (median forecast was 1.1 percent)
- Household spending grew at a 4.4 percent pace, revised from an initial estimate of 4.2 percent (forecast was 4.2 percent) and added 2.94 percentage points to GDP growth
- Biggest downward revisions compared with initial estimate were in state and local government spending, inventories, net exports
- Gross domestic income climbed 0.2 percent
- Corporate pretax earnings fell 4.9 percent from a year earlier; they were down 1.2 percent from the prior quarter
The economy’s failure to develop a sustained pickup has helped keep Federal Reserve policy makers from pulling the trigger on an interest-rate increase so far this year. Economists project a third-quarter rebound driven by household purchases and more stockpiling, and the report showed wages and salaries were revised sharply higher, indicating consumers have the wherewithal to continue spending. A weakening picture for profits casts a shadow over the outlook for already-sluggish business investment and possibly for hiring, which has been robust so far this year.
“It’s a story about the consumer carrying the economy right now,” said Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit, who accurately forecast GDP growth. “That’s definitely something we like to see. We’ll get better growth in the second half.”
Inventories shrank by an annualized $12.4 billion in the second quarter, subtracting 1.26 percentage points from GDP, the most in more than two years
Business investment in equipment fell 3.7 percent, more than previous estimate of 3.5 percent
Trade added less to GDP than originally estimated, as imports rose instead of falling in the initial report
- Residential investment fell 7.7 percent, more than prior estimate of 6.1 percent
- Inflation excluding food and energy was 1.8 percent at an annual rate, slightly faster than initial figure of 1.7 percent
- Wages and salaries for the second quarter climbed by $92.6 billion, up $44.2 billion from the previous estimate; Commerce cited analysis of historical wage revisions that incorporate Labor Department’s quarterly census of employment and wages
State and local outlays decreased at a 2.2 percent annualized rate and subtracted 0.25 percentage point from growth, the most since the last three months of 2012
Nigeria’s Untapped Coffee Sector Holds the Key to $2 Billion Annual Revenue
Amidst declining foreign reserves and the need for alternative revenue streams, Nigeria’s overlooked coffee industry emerges as a potential powerhouse capable of contributing over $2 billion annually to foreign exchange earnings.
Industry experts emphasize the necessity for strategic investments and modernized farming practices to unlock the full economic potential of the coffee sector.
While Nigeria is not among the top 10 coffee producers in Africa, the country’s untapped coffee industry holds the promise of significant financial gains, job creation, and sustainable agricultural development.
The urgency for revitalization comes as Nigeria grapples with a decline in foreign reserves, dropping from $38.25 billion in September 2022 to $33.23 billion in the third quarter of 2023.
Salihu Imam, Chairman of the National Coffee and Tea Association of Nigeria, Oyo State, highlighted the global significance of coffee, stating, “Coffee is the second most traded/valuable of all commodities and first in Agricultural commodities in the world.”
The potential economic impact extends beyond immediate financial gains, with Nigeria positioning itself as a key player in the global coffee trade.
Despite its potential, Nigeria’s coffee exports remain modest, producing less than one million bags annually.
In contrast, Ethiopia, the largest coffee exporter in Africa, is projected to produce 8.25 million bags. Experts suggest that Nigeria, with its unique coffee varieties, could generate $2 billion annually.
Segun Lary-Lean, President of the West Africa Specialty Coffee Association, emphasized the robust global demand for coffee, comparing it to water in Western countries.
He noted the significant earnings of coffee-producing nations like Brazil, Colombia, Vietnam, and Kenya, which experienced a 17% increase in coffee earnings.
In a call to action, industry players urge the Federal Government to prioritize strategic investments, modernized farming practices, and value-added processing to harness the coffee sector’s full economic benefits.
Unlocking the potential of Nigeria’s coffee industry stands not only as a financial opportunity but as a catalyst for broader economic growth and diversification.
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