Connect with us

Economics

Shipping Around Retail ‘Inflation’

This whole “inflation” scenario isn’t really that difficult to piece together, effect from cause. Sure, Jay Powell’s trying to nuke it by hiking…

Published

on

This whole “inflation” scenario isn’t really that difficult to piece together, effect from cause. Sure, Jay Powell’s trying to nuke it by hiking the federal funds rate, but no one really uses fed funds and the problem isn’t the unsecured cost of borrowing bank reserves (not money) that are literally overflowing.

For one, the FOMC’s efforts aren’t going to get more gasoline out of refiners who aren’t getting enough crude oil from producers who still think this is all too familiar for them to climb aboard the red-hot-economy narrative so as to restart Drill Baby Drill.

The other huge piece of consumer prices is the online shopping craze. Already a serious trend before 2020, once reluctant Americans agreed to stay in their homes for the government’s overreaction to the coronavirus pandemic, boredom along with the conveniently-timed Uncle Sam’s depositing got everyone hooked on online shopping. It’s not a coincidence that Amazon’s fortunes surged when prices began to.



Online spending has meant buying stuff made elsewhere and having it shipped in a different way than traditional brick and mortar. The latter has an established supply chain and existing middlemen like procedures to handle goods traffic; while the former required a massive retool at a time when the ability to accomplish rearranging (and managing the redirected flow of) everything was at its lowest point.

Supply shock simple economics (lower case “e”); rightward shift in demand, inelastic supply, therefore prices.

The biggest beneficiary of this imbalance has been the shippers. They’ve been shipping the same amount of product if not less than before, but are getting paid a King’s Ransom because of literal impatience and what appears to be a permanent addiction to the Amazon app.

According to the US Census Bureau, retail sales in America recorded by these Non-store retailers continue to climb just as they have ever since Uncle Sam’s Helicopters #2 and #3 January and March 2021. While the online sales of goods may be robust, or appear to be, since these figures are not adjusted for price changes, shipping companies, though, have changed their outlooks in spite of all this.

Consumer sentiment is changing over time. Consumer behavior is changing. Inflation is going up. Disposable income is pressured. We see volume growth lower than previously expected due to … consumer sentiment. We all feel it.

The “we” here begins with Germany’s Hapag-Lloyd, the world’s fifth-largest container line operator, who is unofficially speaking on behalf of the company’s other peers.

And what’s said is absolutely true, in the US and around the world (particularly Europe where spending is already falling off). Sentiment, at least, has tanked given the sustained price increases and the inability of shippers (unwillingness, perhaps?) to help bring down costs, reduce frictions and delays, thereby create more elasticity in the entire supply chain.

How’s Jay Powell going to help out here?


The economy may not need him as it may already be too late. As the Germans were lamenting, consumer sentiment indices across the US retail landscape are indeed seriously depressed. The Conference Board’s is the best of them, only down somewhat from last year’s Euro$ #5 transition, though that’s after having failed to rebound more fully from the 2020 recession.

The University of Michigan’s consumer survey, like IBD/TIPP’s, each the lowest in many years, all the way back to 2011.



However American consumers may feel, retail sales continue to climb. The Census Bureau’s latest data show solid gains outside of the virtual shopping malls, too. Headline sales (seasonally adjusted) rose much more than expected in April 2022, increasing 0.9% from March’s upward revised estimate.

It wasn’t all gasoline, either, when excluding sales of gasoline stations retail sales were ever better, up nearly 1.3% on the month.

The catch, though, is pricing. Why are consumers spending so much though so gloomy about doing so? In real terms, spending isn’t growing nearly as quickly – if at all. Real retail sales (or deflated ex-gasoline sales) are somewhat lower than they had been at the start (and peak) of the helicopter-led demand shift (into that supply inelasticity).


And that’s only where the trouble begins. Consumers are paying a lot more and getting a little less than last year, furthermore this has come at the expense of spending on services which you don’t see in retail sales (but do elsewhere like GDP).

Fewer services, fewer goods, paying more for all of it. Consumer sentiment likewise as simple as “inflation.”

The question now is, how long – if at all – this begins to impact nominal spending on goods, too. This might be a good question to ask someone who is and has been at the center of the whole “inflation” dynamic. Some person who knows a thing or two about prices and consumer/business demand. An expert or two in the business of goods, even if they might speak German.

Obviously, not Jay Powell.

Read More

Continue Reading

Economics

Expert on Bath & Body Works: ‘an easy double the next three years’

Bath & Body Works Inc (NYSE: BBWI) might have been painful for the shareholders this year, but the road ahead will likely be a rewarding one, says…

Published

on

Bath & Body Works Inc (NYSE: BBWI) might have been painful for the shareholders this year, but the road ahead will likely be a rewarding one, says the Senior Vice President and Portfolio Manager at Westwood Group.

BBWI separated from Victoria’s Secret

The retail chain separated from Victoria’s Secret in 2021, which, as per Lauren Hill, clears the way for a 100% increase in the stock price in the coming years. On CNBC’s “Closing Bell: Overtime”, she said:

[Bath & Body Works] has really strong pricing power. They have 85% of their supply chain in the United States and with the Victoria’s Secret brand now gone, I think it’s a wonderful buy; an easy double the next three years.

Last month, the Columbus-headquartered company reported results for its fiscal first quarter that topped Wall Street expectations.

Bath & Body Works is a reopening play

The stock currently trades at a PE multiple of 6.64. Hill is convinced Bath & Body works is a reopening name and will perform so much better as the world continues to pull out of the pandemic. She noted:

Customers have missed buying their scented products in store and as their social occasion calendars fill up, they are getting back out there and buying more gifts, including Bath & Body Works products.

Hill also dubbed BBWI a great pick amidst the ongoing inflationary pressures because of its reasonably priced products. Shares are down more than 50% versus the start of 2022.

The post Expert on Bath & Body Works: ‘an easy double the next three years’ appeared first on Invezz.

Read More

Continue Reading

Economics

Majority Of C-Suite Execs Thinking Of Quitting, 40% Overwhelmed At Work: Deloitte Survey

Majority Of C-Suite Execs Thinking Of Quitting, 40% Overwhelmed At Work: Deloitte Survey

Authored by Naveen Anthrapully via The Epoch Times,

A…

Published

on

Majority Of C-Suite Execs Thinking Of Quitting, 40% Overwhelmed At Work: Deloitte Survey

Authored by Naveen Anthrapully via The Epoch Times,

A majority of C-suite executives are considering leaving their jobs, according to a Deloitte survey of 2,100 employees and C-level executives from the United States, Canada, the UK, and Australia.

Almost 70 percent of executives admitted that they are seriously thinking of quitting their jobs for a better opportunity that supports their well-being, according to the survey report published on June 22. Over three-quarters of executives said that the COVID-19 pandemic had negatively affected their well-being.

Roughly one in three employees and C-suite executives admitted to constantly struggling with poor mental health and fatigue. While 41 percent of executives “always” or “often” felt stressed, 40 percent were overwhelmed, 36 percent were exhausted, 30 percent felt lonely, and 26 percent were depressed.

“Most employees (83 percent) and executives (74 percent) say they’re facing obstacles when it comes to achieving their well-being goals—and these are largely tied to their job,” the report says. “In fact, the top two hurdles that people cited were a heavy workload or stressful job (30 percent), and not having enough time because of long work hours (27 percent).”

While 70 percent of C-suite execs admitted to considering quitting, this number was at only 57 percent among other employees. The report speculated that a reason for such a wide gap might be the fact that top-level executives are often in a “stronger financial position,” due to which they can afford to seek new career opportunities.

Interestingly, while only 56 percent of employees think their company executives care about their well-being, a much higher 91 percent of C-suite administrators were of the opinion that their employees believe their leaders took care of them. The report called this a “notable gap.”

Resignation Rates

The Deloitte report comes amid a debate about resignation rates in the U.S. workforce. Over 4.4 million Americans quit their jobs in April, with job openings hitting 11.9 million, according to the U.S. Department of Labor. In the period from January 2021 to February 2022, almost 57 million Americans left their jobs.

Though some are terming it the “Great Resignation,” giving it a negative connotation, the implication is not entirely true since most of those who quit jobs did so for other opportunities. In the same 14 months, almost 89 million people were hired. There are almost two jobs open for every unemployed person in the United States, according to MarketWatch.

In an Economic Letter from the Federal Reserve Bank of San Francisco published in April, economics professor Bart Hobijn points out that high waves of resignations were common during rapid economic recoveries in the postwar period prior to 2000.

“The quits waves in manufacturing in 1948, 1951, 1953, 1966, 1969, and 1973 are of the same order of magnitude as the current wave,” he wrote. “All of these waves coincide with periods when payroll employment grew very fast, both in the manufacturing sector and the total nonfarm sector.”

Tyler Durden Sat, 06/25/2022 - 20:30

Read More

Continue Reading

Spread & Containment

Optimism Slowly Returns To The Tourism Sector

Optimism Slowly Returns To The Tourism Sector

Coming off the worst year in tourism history, 2021 wasn’t much of an improvement, as travel…

Published

on

Optimism Slowly Returns To The Tourism Sector

Coming off the worst year in tourism history, 2021 wasn't much of an improvement, as travel remained subdued in the face of the persistent threat posed by Covid-19.

According to the United Nations World Tourism Organization (UNWTO), export revenues from tourism (including passenger transport receipts) remained more than $1 trillion below pre-pandemic levels in 2021, marking the second trillion-dollar loss for the tourism industry in as many years.

As Statista's Felix Richter details below, while the brief rebound in the summer months of 2020 had fueled hopes of a quick recovery for the tourism sector, those hopes were dashed with each subsequent wave of the pandemic.

And despite a record-breaking global vaccine rollout, travel experts struggled to stay optimistic in 2021, as governments kept many restrictions in place in their effort to curb the spread of new, potentially more dangerous variants of the coronavirus.

Halfway through 2022, optimism has returned to the industry, however, as travel demand is ticking up in many regions.

You will find more infographics at Statista

According to UNWTO's latest Tourism Barometer, industry experts are now considerably more confident than they were at the beginning of the year, with 48 percent of expert panel participants expecting a full recovery of the tourism sector in 2023, up from just 32 percent in January. 44 percent of surveyed industry insiders still think it'll take until 2024 or longer for tourism to return to pre-pandemic levels, another notable improvement from 64 percent in January.

Tyler Durden Sat, 06/25/2022 - 21:00

Read More

Continue Reading

Trending