- U.S. Retail Sales Picked Up in December on Motor Vehicle Demand
Sales at U.S. retailers accelerated in December on the heels of stronger demand for motor vehicles, capping a year of improvement for the nation’s merchants.
The 0.6 percent gain last month followed a revised 0.2 percent advance in November, Commerce Department figures showed Friday. For all of 2016, sales climbed 3.3 percent, exceeding the 2.3 percent advance a year earlier.
Americans flocked to auto dealerships last month to top off a record year for the industry at the expense of some other retailers, offering a mixed picture of sales during the year-end holidays. At the same time, steady hiring, improving incomes and a surge in consumer sentiment about the economy’s prospects could help keep shoppers in stores.
“Consumption for the quarter doesn’t look so bad,” Sam Coffin, an economist at UBS Securities LLC, said before the report. “There’s some hint that spending might accelerate, within the context that all the sentiment numbers look better.”
The median forecast of economists surveyed by Bloomberg called for a 0.7 percent increase in December. November sales were revised from an initially estimated 0.1 percent gain, while October purchases climbed 0.7 percent, more than the 0.6 percent previously reported.
Eight of 13 major retail categories showed gains last month. In addition to gains at car dealers, demand improved at Internet retailers, furniture stores and building materials outlets. Sales declined at department stores, restaurants and electronics and appliances merchants.
Purchases excluding motor vehicle dealers and gasoline stations were little changed in December, weaker than the median forecast for a 0.4 percent gain.
Sales at auto dealers increased 2.4 percent last month, the most since April, while receipts at service stations rose 2 percent as fuel costs climbed.
The auto figures are in line with industry data. Sales of cars and light trucks jumped to a 18.3 million annualized rate in December, pushing the year’s total purchases to a record
17.55 million, according to Ward’s Automotive Group figures.
The nationwide average cost of a gallon of regular gasoline rose to $2.34 on Dec. 31 from $2.16 at the end of the prior month, according to figures from motoring group AAA.
Core sales, the figures that are used to calculate gross domestic product and which exclude such categories as autos, gasoline stations and building materials, rose 0.2 percent last month after little change in November.
Gold Gained Ahead of Joe Biden Inauguration 2021
Gold price rose from one and a half month low on Tuesday ahead of President-elect Joe Biden’s inauguration on Wednesday.
The precious metal, largely regarded as a haven asset by investors, edged up by 0.2 percent to $1,844.52 per ounce on Tuesday, up from $1,802.61 on Monday.
He said, “The key factor appears to be the (U.S.) currency.”
As expected, a change in administration comes with the change in economic policies, especially taking into consideration the peculiarities of the present situation. In fact, even though Biden, Janet Yellen and the rest of the new cabinet are expected to go all out on additional stimulus with the support of Democrats controlled Houses, economic uncertainties with rising COVID-19 cases and slow vaccine distribution remained a huge concern.
Also, the effectiveness of the vaccines can not be ascertained until wider rollout.
Still, which policy would be halted or sustained by the incoming administration remained a concern that has forced many investors to once again flee other assets for Gold ahead of tomorrow’s inauguration.
Crude Oil Holds Steady Above $55 Per Barrel on Tuesday
Brent Crude oil, against which Nigerian crude oil is priced, rose from $54.46 per barrel on Monday to $55.27 per barrel as of 9:03 am Nigerian time on Tuesday.
Last week, Brent crude oil rose to 11 months high of $57.38 per barrel before pulling back on rising COVID-19 cases and lockdowns in key global economies like the United Kingdom, Euro-Area, China, etc.
While OPEC has left 2021 oil demand unchanged and President-elect Joe Biden has announced a $1.9 trillion stimulus package, experts are saying the rising number of new cases of COVID-19 amid poor vaccine distribution could drag on growth and demand for oil in 2021.
On Friday, Dan Yergin, vice-chairman at IHS Markit, said in addition to the stimulus package “There are two other things that are going with it … one is of course, vaccinations — in the sense that eventually this crisis is going to end, and maybe by the spring, lockdowns will be over.”
“The other thing is what Saudi Arabia did. This is the third time Saudi Arabia has made a sudden change in policy in less than a year, and this one was to announce (the) 1 million barrel a day cut — partly because they are worried about the impact of the surge in virus that’s occurring,” he said.
Also, the stimulus being injected into the United States economy could spur huge Shale production and disrupt OPEC and allies’ efforts at balancing the global oil market in 2021.
Crude Oil Pulled Back Despite Joe Biden Stimulus
Crude oil pulled back on Friday despite the $1.9 trillion stimulus package announced by U.S President-elect, Joe Biden.
Brent crude oil, against which Nigeria’s oil is priced, pulled back from $57.38 per barrel on Wednesday to $55.52 per barrel on Friday in spite of the huge stimulus package announced on Thursday.
On Thursday, OPEC, in its latest outlook for the year, said uncertainties remain high in 2021 with the number of COVID-19 new cases on the rise.
OPEC said, “Uncertainties remain high going forward with the main downside risks being issues related to COVID-19 containment measures and the impact of the pandemic on consumer behavior.”
“These will also include how many countries are adapting lockdown measures, and for how long. At the same time, quicker vaccination plans and a recovery in consumer confidence provide some upside optimism.”
Governments across Europe have announced tighter and longer coronavirus lockdowns, with vaccinations not expected to have a significant impact for the next few months.
“The complex remains in pause mode, a development that should not be surprising given the magnitude of the oil price gains that have been developing for some 2-1/2 months,” Jim Ritterbusch, president of Ritterbusch and Associates, said.
Still, OPEC left its crude oil projections unchanged for the year. The oil cartel expected global oil demand to increase by 5.9 million barrels per day year on year to an average of 95.9 million per day in 2020.
But also OPEC expects a recent rally and stimulus to boost U.S. Shale crude oil production in the year, a projection Investors King experts expect to hurt OPEC strategy in 2021.
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