From the start of the pandemic in March 2020 until now, going to the grocery store has been my only weekly outing beyond the walls of my home in California. Like many Americans, the closures of public spaces and limitations on restaurants has led to greater use of my kitchen at home. But, has beef always been $5.26 a pound? When did a loaf of bread cost over $2.50? For those of us doing the grocery shopping, we may notice that weekly food expenditures are increasing, and we have reason for concern that prices may remain higher as long as the pandemic continues. Inflated grocery prices are a clear reality for American consumers, but the outlook for continued inflation is still unclear.
At the start of 2021, grocery prices were at a seven-year high, with average prices of commonly bought foods such as pork, sugar, and butter up 15% in total since the summer of 2012, according to NielsenIQ. While notable, this was not significantly more than the general rate of inflation – the broader Consumer Price Index from 2012 to 2021 rose 14%. However, grocery prices are now rising at a faster rate than prices in other areas of the consumer sector. Specifically, since the start of 2021 average grocery prices have spiked by 2.6% while the Consumer Price Index is up only 0.6%. This jump is even more pronounced in certain regions and cities; NBC News reports that grocery prices in Philadelphia and Dallas are up over 5% since the beginning of the year.
A number of factors are contributing to higher grocery prices. On the demand side, consumers have been buying more groceries as a result of pantry stocking and eating at home more often, which naturally puts upward pressure on prices. On the supply side, numerous factors have caused disruptions, resulting in grocery stores being forced to pass higher prices onto consumers. Among these factors are higher input and commodity costs (Bloomberg reports that corn prices have doubled in the past year, soybeans are up 80%, and wheat is up 30%), higher freight costs as the price of oil has increased, and record backlogs. The pressure that grocers have been under is also evident in their recent reduced circulation of coupons, which NieslenIQ estimates is down from being used on an average of 31.4% of grocery units sold in the U.S. (pre-pandemic) to only 28.6% now.
While the outlook for inflation is hotly debated, there is hope for consumers that certain underlying sources of the uptick are temporary in nature. According to President Biden’s Council of Economic Advisers, “the likeliest outlook over the next several months is for inflation to rise modestly and to fade lower”. Some others outside the administration share a similar rosy view: Barclays Senior U.S. Economist Blerina Uruci recently said “as the economy [opens] up, we don’t think it’s a sustained source of inflation over the medium term” and that core inflation will likely fall to 2% by the second half of the year.
While some argue that inflation on a macro level may be higher over the long term because of government spending/stimulus and certain global trade dynamics, it stands to reason that pandemic-related inflationary pressures (which have clearly impacted grocery items) will abate as the virus comes under better control. And with nearly 33.2% of the U.S. population fully vaccinated and 45.5% with at least a first dose (according to the CDC), we can hope for somewhat of a return to normal soon. However, given the global nature of the supply chains for many foods, and the fact that only 3.8% of the entire world is currently vaccinated, we may need to settle with paying more for our beef and bread for a while longer than we’d like.
Headlines of the Week
Hellman & Friedman, a global private equity firm, has entered into a definitive agreement to acquire At Home Group Inc., the home décor superstore, for an all-cash transaction valued at $2.8 billion dollars. “As we enter the next chapter for our company, Hellman & Friedman is the ideal partner to advance our At Home 2.0 long-term strategy,” said Lee Bird, At Home chairman and CEO. Under the terms of the agreement, At Home stockholders will receive $36 per share in cash, which represents a premium of approximately 17% to the company’s closing stock price of $30.67 on May 4, the last trading day prior to media speculation regarding a possible transaction, and a premium of approximately 25% to the 30-day volume weighted average share price. The transaction is expected to close in the third quarter of 2021, subject to the satisfaction of customary closing conditions, including the approval of At Home’s stockholders. Upon completion of the transaction, At Home will become a privately held company and At Home’s shares will no longer trade on The New York Stock Exchange.
Authentic Brands Group and the largest U.S. mall operator agreed to buy Bellevue-based outdoor clothing and gear merchant Eddie Bauer, adding another well-known brand to a portfolio of retail names. Authentic and SPARC Group are acquiring Eddie Bauer, including its 300 stores and e-commerce business, from a unit of Golden Gate Capital, according to a Friday statement. SPARC is a joint venture between Authentic and Simon Property Group. Terms weren’t disclosed. The purchase is the latest in a series of retail deals for Simon and Authentic, which once restricted itself to buying just brands rather than brick and mortar presence. The new owners plan to keep Eddie Bauer headquartered in the Seattle area and under the leadership of current President Damien Huang. The deal is expected to close by June 1.
Apparel & Footwear
Denim-based True Religion successfully emerged from Chapter 11 bankruptcy protection in October 2020 after filing in April of last year. Michael Buckley, who was president of True Religion from 2006 to 2010, returned to the brand in 2019 and guided it through a “massive restructuring.” “The company got disconnected with who the consumer was,” Buckley said in an exclusive interview. True Religion’s trip to bankruptcy court allowed it to shed 37 store leases and exit a $3 million corporate lease. Restructuring the organization involved cutting $30 million in SG&A and rethinking the brand’s supply chain. For the trailing 12 months that ended in March, the company logged EBITDA of $35 million, compared to a loss of $25 million in the trailing 12 months that ended in March 2020.
British online fashion retailer Boohoo reported a 37% jump in annual core earnings, benefiting from the rise in digital shopping during the COVID-19 pandemic and weathering the negative publicity over its supply chain failings. In September, Boohoo accepted all the recommendations of an independent review that found major failings in its supply chain in England after newspaper allegations about working conditions and low pay in factories in the Leicester area. The group, which sells clothing, shoes, accessories and beauty products aimed at people aged 16 to 40, pledged to fix the problems with its ‘Agenda for Change’ programme. In March, it revealed a major consolidation in its list of British suppliers. Boohoo made adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of 173.6 million pounds ($241.4 million) in the year to Feb. 28, exceeding analysts’ average forecasts and the 126.6 million pounds made in the 2019-2020 financial year.
Gap Inc. continues to streamline its brand portfolio to focus on its core banners. The retailer has entered into an agreement to sell luxury apparel brand Intermix to private-equity firm Altamont Capital Partners. Altamont will acquire the entire Intermix business, including all store leases, assets and e-commerce. Terms of the deal were not disclosed. Gap bought Intermix for approximately $130 million at the end of 2012. The retailer, which offers a mix of luxury brands including merchandise from up-and-coming designers, has 31 stores in the United States and an e-commerce site.
Nogin, a market leader in outsourced e-commerce for major fashion and consumer product companies, has acquired the assets of ModCloth, the online retailer of women’s fashion and accessories. The purchase price was not disclosed. This marks the fourth chapter for ModCloth, which was founded in 2002 and specializes in vintage-inspired fashions, shoes, handbags and accessories for 18- to 35-year-old women. Nogin, based in Tustin, Calif., acquired the brand from Go Global Retail, which purchased it from Walmart Inc. in 2020. Walmart had bought the brand in 2017 from ModCloth founders Susan Gregg Koger and Eric Koger, (who had started the brand as students at Carnegie Mellon University,) as part of the discount retailer’s strategy to acquire digitally native brands to educate itself about next-generation e-commerce. Over the years, Nogin has provided intelligent commerce solutions to major brands such as Honeywell, Hurley, Bebe, Lululemon, Justice, True Religion, Yeezy and most recently, Charming Charlie.
Fashion boutique South Moon Under is being acquired by Ames Watson, a private investment firm that acquired hat specialist Lids from Genesco in 2019. Terms of the deal were not disclosed. Annapolis, Maryland-based SMU currently has 30 stores spanning from Connecticut to Florida. In a press release, Ames Watson indicated it plans to expand the retailer. “We see a tremendous opportunity to grow a brand with high recognition into a national store with a local approach,” Lawrence Berger, co-founder and partner with Ames Watson, said in the release.
Athletic & Sporting Goods
Peloton recalled its Tread+ and Tread treadmills, and the company admitted it was wrong to fight the Consumer Product Safety Commission’s request that it do so. About 125,000 treadmills are included in the recall. The CPSC said that there has been one child death and 70 other injuries tied to the treadmills. But when the federal safety agency issued a warning about the dangers last month, Peloton took the unusual step of refusing to recall them. “I want to be clear, Peloton made a mistake in our initial response to the CPSC’s request,” said Peloton CEO John Foley. “We should have engaged more productively with them from the outset. For that, I apologize.” The recall covers the $4,295 Tread+ as well as Peloton’s cheaper Tread, which costs $2,495. That machine hasn’t yet been released in the United States. Peloton pulled both machines off its website.
MacNeill Pride Group, a diversified global designer and manufacturer of outdoor products and sporting goods, has acquired GCI Outdoor, a leading designer of portable, built-to-last outdoor recreation equipment. Terms of the transaction were not disclosed. MPG is a portfolio company of Centre Partners. Founded in 1996, GCI offers high quality outdoor recreation equipment, including portable camping chairs, camp kitchens, waterside chairs and recliners and other outdoor gear. Its iconic line of folding rocking chairs, such as the Freestyle RockerTM and RoadTrip RockerTM, are widely sought after by consumers for their comfort, quality and durability, leading GCI Outdoor to become the #1 brand in the category. GCI represents another category-leading brand added to a growing MPG portfolio that includes the recently-acquired ORCA, a leading supplier of outdoor accessories; PrideSports, the world’s leading supplier of golf and sports accessories and training tools; Pride Manufacturing Company LLC, which manufacturers engineered wood products such as golf tees; and MacNeill Engineering, a leading designer of cleats, studs and other footwear components under the CHAMP® and Softspikes® brands.
Under Armour will pay $9 million to settle federal regulators’ charges that it misled investors about its sales growth in 2015 and 2016 to meet analysts’ revenue targets. For six consecutive quarters beginning in the third quarter of 2015, the Baltimore-based sports apparel brand “pulled forward” a total of $408 million in existing product orders that customers, such as retailers, had requested be shipped in future quarters, the U.S. Securities and Exchange Commission found. The SEC order said Under Armour attributed its revenue growth during those quarters to factors such as growth in training, running, golf and basketball, without disclosing the “pull forward” practices.
Cosmetics & Pharmacy
Estée Lauder reported quarterly sales that came in short of analysts’ estimates despite early signs of travel bouncing back. Sales rose in every region but didn’t meet expectations, with demand for makeup still stifled as customers don’t see many occasions to wear cosmetics like lipstick. Global net sales for the fiscal third quarter ended March 31 rose 16 percent to $3.86 billion, or 13 percent excluding currency fluctuations, the company said Monday in a statement. Resurgences in Covid-19 cases also caused temporary shutdowns of stores in important markets including the U.K., Japan, Canada, France and Brazil. Consumer traffic to stores remains down globally compared to pre-pandemic levels, the company said. Net sales for makeup declined across nearly all of Estée Lauder’s brands. Products like foundation and lip gloss have been particularly hurt by the pandemic, with workers yet to fully return to offices during the day and nightlife still muted in many countries around the world. The only region that saw growth in makeup last quarter was Asia.
Amid the pandemic, CVS Health’s first-quarter brought increased revenue. The Woonsocket, R.I.-based company saw first-quarter revenues up 3.5% year over year, totaling $69.1 billion, and earnings per share of $1.68 — an increase of 9.8% over the prior year period. Operating income and adjusted operating income increased 3.4% and 2.2%, respectively, for the three months ended March 31, compared with the prior year. The company attributed the increase in both operating income and adjusted operating income to growth in the pharmacy services and healthcare benefits segments. This was partially offset by declines in the retail/long-term care segment, CVS Health said. Net income was $2.22 billion, up from $2.01 billion a year earlier.
Discounters & Department Stores
J.C. Penney has eliminated about 650 jobs in an effort to adjust “our structure to better meet our strategic priorities,” according to a company statement. The layoffs came out of the retailer’s corporate, field and store teams. They followed an operational review by new owners Simon Property Group and Brookfield Asset Management. All told, Penney still has more than 50,000 associates, according to the company. “While it is never easy to make decisions that directly affect our valued associates, the actions last week … were a necessary step to ensure the long-term success of our Company,” Penney said.
A union that represents Macy’s employees scored a victory in challenging a self-checkout feature in the retailer’s mobile app. An independent arbitrator ruled last week that Macy’s violated its bargaining agreement and said the company must find a way to credit employees for sales through the app or exclude departments, such as men’s suits and cosmetics, that have commission-based pay. The labor dispute spotlights the tension between technology and workers in the retail industry, especially as the pandemic drives more digital adoption and retailers race to adapt to consumer preferences.
Walmart and Sam’s Club are offering faster payments and new financing opportunities to assist diverse suppliers in overcoming access-to-capital challenges, company leadership announced in a press release last week. Through a partnership with the financial technology company C2FO, Walmart Inc. has expanded its early payment program using an interface where suppliers pick which of their invoices are to receive early payments, with aims to increase suppliers’ “ability to gain access to working capital,” according to the release. Walmart will first independently fund the program and plans to provide more funding options through collaborations with banks.
Brookfield Property Partners released one of its last statements as a publicly traded REIT Friday, reporting that first quarter funds from all operations fell nearly 60% year over year to $125 million. Overall, the company was in the black in the quarter, reaching net income of $731 million, up from its $373 million loss a year ago. Its core retail business fed the decline, as funds from those operations fell 45% to $108 million, per a company press release. Brookfield trimmed the portfolio recently, handing over the keys to three malls (Florence Mall in Kentucky, Bayshore Mall in California and Pierre Bossier Mall in Louisiana), and walking away from what were delinquent commercial mortgage-backed securities loans, according to a KBRA Credit Profile report. The company also said it gained $63 million by selling off its interest in Forever 21, which it acquired last year at a bankruptcy auction, with Authentic Brand Group and rival REIT Simon Property Group, for $81 million.
Emerging Consumer Companies
Figs Inc., a Santa Monica-based health care apparel brand, filed for an initial public offering on May 5, with plans to be listed on the New York Stock Exchange under symbol FIGS. Co-Chief Executives Heather Hasson and Trina Spear founded Figs in 2013. The digital native brand sells 98% of its products through its website and mobile app. Last year, Figs’ community of active consumers grew from 600,000 to about 1.3 million, and about 60% were repeat shoppers. That helped the brand grow net revenue 138% to $263.1 million in 2020 and 172.4% to $87 million during the first quarter of 2021. Figs reported net income of $57.9 million in 2020, compared to a net loss of $300,000 for 2019.
Coper Cow, the four-year-old sustainably-focused Vietnamese coffee company, announced the closing of its Series A round of $8.5M. The round was co-led by Cultivian Sandbox and Arborview Capital with participation from Siddhi Capital, Silverton Partners, Social Starts, Montage Ventures, CRCM, and Stormbreaker Ventures. The funds will be used to expand distribution and drive product innovation. The company’s fastest growing business is a subscription service that features a rotating selection of naturally flavored coffees. Its single-use pour-over coffees and natural creamers are distributed in over 3,000 retailers, including Whole Foods Market, Sprouts, and Walmart nationwide.
UrbanStems, the Washington, DC-based floral and gifting company, announced the close of a $20M Series C round. The investment was led by SWaN & Legend Venture Partners and DFE Capital Management, with participation from Motley Fool Ventures, Gordon Segal, Gaingels, PAN, and other strategic investors. The round brings the total capital raised to date to $48 million. With the new funding, UrbanStems will continue to hire and grow its team, build on its leading gifting technology platform, and scale infrastructure to support the brand’s accelerated growth plans.
Grocery & Restaurants
JAB Holding-owned Krispy Kreme has confidentially filed a draft registration for an initial public offering with the U.S. Securities and Exchange Commission, which would bring the company public again after five years after parent company JAB holding had taken it private. Krispy Kreme first went public in 2000 but had to file Chapter 11 bankruptcy following financial restatements and investigations into its accounting practices. The company was then bought by JAB Holding Company in 2016 in a $1.35 billion deal as the holding company was betting on the popularity of coffee companies. The brand has been a private company ever since.
Tao Group Hospitality, which operates restaurants, nightclubs, lounges and other venues across the U.S. and overseas, said it has acquired Hakkasan Group, which operates several locations of its namesake restaurant and other restaurants and nightlife destinations globally. The combined company operates 61 entertainment, dining and nightlife venues in 22 markets across five continents. Its brands include Tao Group Hospitality’s Tao, Marquee, Lavo, Beauty & Essex, Avenue, Cathédrale and Koma, as well as Hakkasan Group’s Hakkasan, Yauatcha, Omnia, Ling Ling, Jewel, Casa Calavera, Herringbone and Searsucker, among others. Hakkasan Group’s portfolio expands Tao Group’s domestic reach in markets that include Las Vegas, Southern California and Miami, while also significantly growing Tao Group’s international presence, including in London, where Hakkasan Group has five venues. Hakkasan Group also operates four venues throughout the Middle East, which Tao Group said will provide a platform for growth in several fast-developing markets.
Home & Road
Leggett & Platt reported first quarter sales of $1.15 billion, a 10% increase from sales of $1.045 billion in the first quarter of last year. Net earnings for the quarter totaled $88 million, up 65% from $53 million adjusted net earnings in the first quarter of 2020. Net earnings were 64 cents per diluted share compared with 40 cents in the same quarter last year. Sales in the bedding products segment for the quarter increased 9% to $536 million. The company said volume in bedding increased 2% and said raw material-related price increases added 9%. Sales in furniture, flooring and textiles climbed 12% to $357 million with an 8% increase in volume driven by residential sales. The company’s operating cash flow was negative $11 million in the quarter, a decrease from $21 million in the same quarter last year, primarily from working capital investments to support growth and inflation. Capital expenditures were $24 million in the quarter.
In one of the most dramatic shifts in the recent history of furniture imports, Vietnam has overtaken China as the largest exporter of finished goods to the U.S. market. According to Furniture Today research, Vietnam shipped just over $7.4 billion in furniture to the U.S. in calendar year 2020, up 31% from the $5.7 billion it shipped in 2019. By comparison, China shipped $7.33 billion to the U.S in the same 12-month period. That number was down 25% from the $9.7 billion China shipped in 2019. While the gap is relatively small, Vietnam’s position on the world stage shows how it has grown in importance over the years. This, of course, started slowly with Vietnam emerging as a force in wood bedroom in response to Chinese bedroom manufacturers being hit with antidumping duties starting in June 2004. An even more dramatic shift has occurred over the past two and a half years as the U.S. government imposed tariffs as high as 25% on almost all furniture categories. Even mattresses migrated to other countries outside China once duties were assigned to that category.
Steinhafel’s Furniture is now 100% employee-owned after selling all of the company’s stock to an Employee Stock Ownership Plan. “We believe that becoming an employee-owned company allows us to leverage our greatest strength, and that is our valued associates,” said Andrew Steinhafel, who recently became company president. “Being part of an employee-owned company means that our associates will benefit directly from the company’s continued success.” The executive team, including Andrew Steinhafel, his father Mark Steinhafel, previous president Gary Steinhafel and Ellen Steinhafel-Lappe, current CFO, said they made the decision in order to secure the future of the business in addition to acting in the best interest of the company’s associates. After 87 years in business, the company said the shift to employee ownership will help preserve the retailer’s culture as a family business that values its associates, customers and the communities they serve.
Jewelry & Luxury
Pandora is going no naturel. As part of its launch of a new lab-grown diamond line, the Danish charm-maker announced it will no longer use natural diamonds in its products. The company’s commitment to lab-grown is for the moment relatively modest—the new line, Pandora Brilliance, is only being introduced in the United Kingdom, but other markets could be added if it proves successful. Still, the announcement sparked headlines around the world with its blunt, disdainful declaration that “mined diamonds will no longer be used in Pandora’s products”—playing into the sometimes-disputed contention that man-made diamonds are more sustainable.
EBay, which features a large luxury watch marketplace among its online offerings, has announced an escrow service to facilitate the buying and selling of watches worth $10,000 or more. The service has been added via a trusted third party, Escrow.com, which will hold funds securely until the transaction is complete. The process requires minimal steps, and there are no processing fees. The escrow service comes on the heels of the Authenticity Guarantee that eBay added last year, which has guaranteed the provenance of more than 7,000 luxury watches sold for $10,000 or more since it launched.
New York brand Judith Ripka is planning to open a new store in Westchester in June. It will be the company’s first store to open in more than 10 years, and the first since it was acquired by Xcel Brands in 2014. The new boutique, located in The Westchester—a shopping mall at 125 Westchester Ave. in White Plains, N.Y.—will be 1,200 square feet worth of space dedicated to Judith Ripka’s signature jewelry and watch collections. “We are looking forward to Judith Ripka’s opening in The Westchester. The White Plains and surrounding communities have such an artistic flair and appreciation for luxury, both of which we are delighted to be part of,” said Bob D’Loren, chairman and CEO of Xcel Brands, in a statement.
Donald Trump may no longer be president, but the trade spats he gleefully picked with the rest of the world continue. The clock is ticking for India and the United States to resolve an ongoing dispute over a digital service tax, and if they don’t, it’s possible—though some say unlikely—that a wide range of Indian jewelry items will be slapped with a new import duty of as high as 25%. A virtual hearing on Indian tariffs is set for May 10, with the final determination likely to be made in the coming weeks. The dispute stems from the determination by the Office of the United States Trade Representative (USTR) that India’s 2% digital service tax, which targets e-tailers like Amazon, is “unfair and discriminatory,” as it affects only non-Indian companies.
Office & Leisure
The parent of the Office Depot retail chain plans to split into two publicly traded companies, reshaping the company as rival Staples pursues an acquisition. ODP Corp. said it would retain its retail consumer and small-business products and services, while separating its Business Solutions Division contract unit and independent regional office-supply distribution operations. The transaction, expected to be completed in the first half of 2022, will occur through a distribution of shares of the new company as a tax-free dividend to ODP’s shareholders, according to a statement Wednesday. The transaction will aid the company in “improving our ability to meet the needs of our customers, while better matching assets and investment profiles of both companies to generate greater value for our shareholders,” Gerry Smith, chief executive officer of ODP, said in the statement.
The British twins who sold their golf driving range operator for $2bn (£1.5bn) last year are planning to repeat their success with the same sport indoors. Steven and Dave Jolliffe, the founders of Topgolf, have raised $60m of investment for mini golf operator Puttshack to roll out new venues in the US. Puttshack, which is backed by British private equity firm Promethean Investments, was unveiled in 2018 and has three sites in London. A fourth has recently opened in Atlanta in the US. Like Topgolf, Puttshack changes the traditional rules of the game. Players win by taking the most, rather than fewest, shots, for instance. And a microchip is implanted in the ball that counts the number of shots taken to negate cheating. More than 1m rounds of mini golf were played during Puttshack’s first 18 months.
Technology & Internet
The severity of the global chip shortage has gone up a notch over the last few weeks and it’s now looking as though millions of people will be impacted. As technology has advanced, semiconductor chips have spread from computers and cars to toothbrushes and tumble dryers — they now lurk beneath the hood of a surprising number of products. South Korean tech giant Samsung said last week that the chip shortage is hitting television and appliance production, while LG admitted the shortage is a risk. Production of low-margin processors, such as those used to weigh clothes in a washing machine or toast bread in a smart toaster, has also been hit. While most retailers are still able to get their hands on these products at the moment, they may face issues in the months ahead. Many companies — particularly those in China who have been hit by sanctions — are boosting their stockpiles of in-demand chips to try to ride out the storm, but that’s making chips even harder to get hold of for other firms. Nations are now being forced to think about how they can increase the number of chips they produce. The vast majority of the world’s chips are made in China, while the U.S. is the second biggest producer. The European Commission, the executive arm of the EU, has said it wants to build up chip manufacturing capacity in Europe as part of an effort to become more self-reliant on what it sees as a critical technology.
Dogecoin, the cryptocurrency branded after a viral dog meme from years ago, has a market capitalization of about $86 billion following a six-month climb of nearly 25,000 percent. In 2013, software engineers Billy Markus and Jackson Palmer launched the satirical cryptocurrency as a way to make fun of bitcoin and the many other cryptocurrencies boasting grand plans to take over the world. They called it dogecoin – pronounced “doje coin” with a soft “g” sound – after the once-popular “doge” shiba inu meme. Its purpose? To be a faster but “fun” alternative to bitcoin. It isn’t totally clear when or why dogecoin captured the heart of Elon Musk. The billionaire Tesla and SpaceX CEO has spent years talking up the token. Musk’s tweets with sometimes oblique references to dogecoin often send it to new record-high prices. These posts have also helped drive retail investor interest. Its price surge last week, attributed by one analyst to Elon Musk’s upcoming “Saturday Night Live” appearance on May 8, even managed to briefly crash Robinhood’s trading app. But there is more to dogecoin’s record price run than just celebrity backing. There is also the enduring sentiment to “stick it” to the establishment. The question of whether dogecoin holds value is debatable. At the moment, there are very few use cases for the token.
Finance & Economy
The U.S. employment picture improved sharply last week, with first-time claims for unemployment insurance hitting a fresh pandemic-era low. Initial claims totaled 498,000 for the week ended March 1, against the Dow Jones estimate of 527,000. That was down from the previous week’s total of 590,000, which saw a substantial upward revision from the initially reported 553,000. While the jobs market still has a long way to go before it fully heals from the pandemic damage, improvement has accelerated in recent weeks as restrictions on activity continue to be lifted. Though the pace has eased lately, the U.S. is still vaccinating more than 2 million people a day and soon will have half the population with at least one shot.
The U.S. trade deficit hit a fresh record high in March as consumers flush with government cash spurred a continuing demand for foreign-made goods. With a new round of $1,400 stimulus checks pouring in and the domestic economy continuing to show substantial improvement, the imbalance in goods and services with the rest of the world swelled to $74.4 billion, the Commerce Department reported. That’s the highest level ever in a data series that goes back to January 1992, and represents a 57.6% increase from the same period a year ago and higher than the $70.5 billion in February. The trade imbalance with China increased more than 22% to $36.9 billion. The deficit with Mexico rose 23.5% to $8.4 billion.