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.
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.
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.
Livestock Feeds Appoints Adegboyega Adedeji as Substantive Managing Director
Adegboyega Adedeji is the Substantive Managing Director
Livestock Feeds Plc on Monday announced it has appointed Mr. Adegboyega Adedeji as the company’s substantive Managing Director, effective from 2nd October 2020.
In a statement released on the Nigerian Stock Exchange (NSE), the company said Mr. Adedeji was the Acting Managing Director of the Company before he was appointed as the Managing Director.
It added that Mr. Adedeji was “formerly the General Manager, Sales and Operations responsible for all sales activities and the strategic development of the Company’s markets, along with new products portfolio generation and development.”
He graduated from the famous Obafemi Awolowo University, Ile-Ife in 1996 and had his MBA from the University of Roehampton, UK in 2018.
He worked with Grand Cereals Limited as Regional Sales Manager before becoming their procurement manager. He moved to UACN Plc in 2007 as the Training Services Manager, a position held till September 2009 before he was transferred to UAC Restaurant.
COVID-19 to Plunge Global Consumer Spending by 8.6 % in 2020
Global Consumer Spending to Drop by 8.6 Percent in 2020
The coronavirus pandemic has changed almost every aspect of people’s daily lives, and consumer spending is no exception. The uncertainty of the COVID-19 crisis caused considerable changes in consumer habits, forcing them to cut down their budgets and prioritize spending.
According to data presented by Stock Apps, the coronavirus outbreak is expected to cut global consumer spending to $44.3trn in 2020, an 8.6% plunge year-over-year.
$4.2trn Drop in Spending Amid COVID-19 Crisis
Falling consumer spending has significant effects on overall Gross domestic product (GDP) growth, considering it accounts for almost 70% of GDP.
Before the COVID-19 crisis, global consumer spending has witnessed steady growth for five years in a row, revealed Statista, IMF, United Nations, World Bank, and Eurostat data. In 2015, it amounted to over $41.5trn. Over the next twelve months, this figure rose to $42.5trn and continued growing. Statistics show that in 2019, consumers worldwide spent a total of $48.5trn, the highest amount in a decade.
However, the coronavirus crisis triggered a sharp fall in 2020, with global consumer spending expected to plunge by $4.2trn year-over-year. Nevertheless, statistics show the following years are set to witness a recovery, with consumer spending growing by 20% to $53.5bn in 2022.
Statista data also revealed that Switzerland represents the leading country globally, with over $40,000 in consumer spending per capita in 2020. Luxembourg ranked second with around $5,000 less than that. Iceland, Denmark, and Norway follow, with $34,300, $25,800, and $25,600, respectively.
60% of Consumers Changed their Shopping Behaviour
The McKinsey&Company survey showed consumers became increasingly cautious with their spending in 2020. Even after countries lifted lockdowns, many consumers still see their incomes fall, forcing them to reduce budgets and change shopping habits.
Statistics show that increased time spent indoors led to significant growth in consumer spending on groceries, household, and home entertainment. Brazil, South Africa, and India lead in this category, with up to 30% consumer spending growth. Major consumer markets like the United States, United Kingdom, Germany, and China witnessed around 15% grocery shopping growth in the first half of the year.
However, with consumers being mindful of their spending and turning to less expensive products, 2020 has witnessed a plunge in clothes and accessories, outside entertainment, services, travel, and transportation spending. Respondents in all countries said they cut down spending in these categories between 20% and 50%.
The McKinsey survey also revealed the COVID-19 outbreak triggered a significant change in the shopping mindset. More than 60% of consumers globally have tried a different brand or shopped at another retailer during the crisis, mostly for convenience, value, and quality.
In China and the United States, over 75% of consumers reported trying a new shopping method, and 60% plan to stick with it post-crisis. The United Kingdom and Germany follow with 71% and 54% of consumers who practiced new shopping behavior. In Japan, where lockdowns weren’t imposed, only 33% of consumers changed their shopping mindset.
Survival Fund: Buhari Commences Disbursement of N75 Billion Support Fund
FG to Commence Disbursement of N75 Billion Survival Fund to MSMEs
The Federal Government to commence the disbursement of N75 billion COVID-19 support fund to successful Micro, Small and Medium Enterprises (MSMEs) that applied for financial support under the National MSME Survival Fund this week.
On September 10, 2020, the Federal Government announced the introduction of two financial support schemes to support around 1.7 million small businesses with N75 billion.
According to Tola Adekunle, the Special Assistant to the President on MSMEs, Office of the Vice President, who doubles as Project Coordinator, Survival Funds Scheme, payment disbursement to some of the beneficiaries of the schemes would commence this week.
He said, “Presently we are doing it in batches of 12 states to be able to monitor the scheme and as we speak now 12 states are ready. We are hoping that by the end of this week, we will be able to pay 12 states.
“We are starting with the artisans and it is 4,500 persons per state, plus 4,500 for transporters, bringing it to about 9,000 for each state. Right now, we have about 54,000 from 12 states.”
Asked by journalists when those on payroll support would start receiving payments, he said “By the end of this month.
“We want to ensure that the staff start getting their salaries and same for the second and third month.”
Adekunle explained that payroll support which was introduced under the survival fund to help businesses that employed between 10 to 50 people, will ensure 10 of the 50 employees are paid between N30,000 to N50,000 depending on their salaries. Payment, he said would commence by the ending of this month.
He said, “We now pay 10 of those people from among the 50 employees and we pay them between N30,000 and N50,000.
“But the minimum we pay is three staffs for three months to support their businesses and to ensure that we are helping businesses to augment their salaries.”
He, however, said the program ended on October 15 but states that were yet to meet their quotas were demanding extension. A demand he said was valid given that only less than 20 states have met their quotas.
“In my own opinion, it is valid but the decision lies in the hands of the committee and the project coordinator so I have to convince them based on data analysis,” he said.
Speaking on the total number of applicants for the payroll support, Adekunle said, “As at the day it closed, we had about 432,000 businesses that had applied. However, we have shortlisted less than 70,000 businesses that qualify and meet the requirements.”
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