With more than 40% of all Americans and over 50% of U.S. adults now vaccinated against COVID-19, the infection rate has dropped considerably and things are slowly returning to normal. Mask mandates and social distancing guidelines that have been in place since last March are being dropped and there is a push to return to pre-pandemic routines.
While it is still unclear how quickly consumer behaviors will return to normal, we are beginning to see early indications. It was not that long ago that even seeing a crowd in a movie or watching video of a past sporting event with stands full of fans would make me feel unsettled. I questioned whether I, or anyone else, would ever really feel comfortable in a crowded setting again.
Boy, was I wrong. The NBA and NHL are currently playing playoff games in many U.S. cities in front of full capacity, boisterous, (and sometimes unruly) fans. Other than the occasional mask, there is little visible difference between the recent playoff crowds and those that flooded stadiums and arenas before the pandemic. When it comes to travel, anyone who went on a trip over Memorial Day weekend can tell you that airports and highways seemed to be back to pre-COVID volumes. The TSA reported that Memorial Day weekend airport traffic was 1.65 million, more than four times greater than last year’s holiday. After a year of living, working, and playing at home, Americans were anxious to get away to just about anywhere but home. In contrast to this return of crowds and travel, if you tune in to the NHL playoff games currently being played in Canada, attendance is still severely limited as mandated by the government since only 5% of Canadians are vaccinated.
One should never underestimate the resilience of the American consumer. Americans will find a way to get what they want. When restaurants closed, consumers quicky turned to takeaway options. When that became a bit too cumbersome, many adopted meal delivery options. As stores limited capacity, more customers turned to ecommerce and/or curbside pickup. And when Amazon was getting overwhelmed and its two-day delivery was no longer a given, web-shoppers sought out alternative ecommerce options. Web-based grocery shopping, which has always lagged behind other areas of ecommerce, saw the pandemic encourage a new cohort of consumers to pull out their phones and try new shopping and delivery apps, rather than don their masks and navigate the serpentine, one-way aisles of their local grocer. According to eMarketer, online grocery sales grew 54% in 2020, outpacing overall ecommerce’s already-eye-popping 44% annual increase.
It is unclear how many of these newly acquired shopping practices will persist beyond the pandemic. Will consumers continue to request curbside pickup once they are comfortable again going into stores? Will retailers still offer curbside pickup?
Regardless of how they shop, U.S. consumers are ready to get back out there and spend. The Organization for Economic Cooperation and Development (OECD) notes that while the U.S. has historically had the highest disposable income among the 27 OECD countries, it has only had the 12th highest savings rate. Americans tend to make more money than others, but also spend more. The U.S. personal savings rate, which is the ratio of personal savings to disposable personal income, has spiked during COVID. The U.S. personal savings rate, which hovered around 7% for the years heading up to the pandemic, has averaged 18.7% since April 2020 and currently stands at 14.9%. As much as they tried, with limited access to travel, restaurants, and entertainment over the past 15 months, U.S. consumers were not able to spend like they are accustomed.
Now that the country is reopening, there is a powerful economic combination of pent-up demand and higher-than-typical savings among U.S. shoppers. American consumers have proven to be a resilient bunch. While some of their recently adopted shopping methods might not survive post-pandemic, there is no doubt that American consumers have the desire and the dollars to do what they do best: spend.
Headlines of the Week
AMC says it has already completed share offering, raises $587 million
AMC Entertainment said it has completed its new stock offering announced just Thursday morning, raising $587.4 million in additional capital. The company said it sold 11.55 million shares at an average price of approximately $50.85 per share in an at-the-market equity program launched earlier Thursday. When AMC announced the offering, it said in a filing it may sell some of the 11 million shares “from time to time.” Apparently that time was now as it completed the offering in about three hours. In a curious move typical of the meme stocks, the shares rallied off their lows on news of the completed sale as retail investors cheered the capital raised and looked past the dilution of their stakes. “Bringing in an additional $587.4 million of new equity on top of the $658.5 million already raised this quarter results in a total equity raise in the second quarter of $1.246 billion, substantially strengthening and improving AMC’s balance sheet, providing valuable flexibility to respond to potential challenges and capitalize on attractive opportunities in the future,” AMC President and CEO Adam Aron said in a statement. AMC, the star of the show in Reddit’s WallStreetBets forum, soared more than 140% last week alone as retail traders continued to encourage each other to pile into the speculative name. The shares have skyrocketed more than 2,900% this year.
Staples offers to buy Office Depot owner’s consumer business for $1B
Staples said on Friday it had offered to buy Office Depot owner ODP Corp’s consumer business for $1 billion, the latest effort by the office supplies retailer to acquire its rival’s assets. Staples offered about $18.27 per share for the business, which it said represents a premium of about 43% to the 30-day average closing price of ODP’s share as of June 2. Last month, ODP said it would spin off its distribution platform that schools, offices and other businesses use to buy supplies into a separate company. Staples is now proposing to buy ODP’s consumer business that includes the Office Depot and OfficeMax retail stores businesses, which it believes is the remaining business in ODP’s planned spin off. ODP did not immediately respond to a Reuters request for comment. Its shares were up about 3% at $45.90.
Apparel & Footwear
Boohoo shareholders advised to block reappointment of co-founder
An influential shareholder advisory group has recommended blocking the reappointment of Boohoo’s co-founder Carol Kane amid concerns about high pay and management’s failures to tackle poor conditions at the factories that make its clothes. Glass Lewis also advised shareholders to vote against Boohoo’s remuneration report saying that a new management incentive scheme could lead to “excessive payouts” based predominantly on the performance of Boohoo’s share price. Under the controversial scheme introduced last year, the co-founders Mahmud Kamani and Kane are both due to receive £50m, a third each of a £150m bonus to 15 key managers, if Boohoo’s market valuation – at about £4bn currently – reaches just over £7.5bn by June 2023. After protests about the plan, which was introduced without a shareholder vote, Boohoo this month said the board would have the power to reduce the payout if the group’s Agenda for Change programme was not implemented in full. The change plan includes establishing a whistleblowing system and responsible sourcing plan as well as publishing the names of all factories used by Boohoo worldwide.
Gap Inc. to pay $300 bonus to hourly employees
Gap Inc. is recognizing its frontline hourly employees with a special bonus. The retailer will give a $300 bonus to the approximately 70,000 hourly employees who support its stores, distribution and call centers in the United States, Canada, Japan, U.K., the Republic of Ireland and Italy. “From quickly learning new ways of working with health and safety protocols to adapting to a surge in demand for online and in-store services like ship from store, buy online pick up in store and curbside pickup, our employees’ commitment and determination helped us get through a year like no other and we are coming out of it stronger than ever, together,” the company stated. Last week, Gap reported a strong first-quarter with net sales that were up 89% from a year ago, and 8% above the 2019 quarter. Comparable sales rose 28% year-over-year, and were up 13% from 2019.
Athletic & Sporting Goods
Clarus to Acquire Rhino-Rack, Premier Aftermarket Automotive Roof Rack and Accessories Brand
Clarus Corporation, a global company focused on the outdoor and consumer enthusiast markets, announced it has entered into a definitive agreement to acquire Australia-based Rhino-Rack Pty Ltd, a leading manufacturer and distributor of highly-engineered automotive roof racks, trays, mounting systems, luggage boxes, carriers, and accessories, for an aggregate purchase price of approximately $USD 198 million ($AUD 255 million). Rhino-Rack will continue to operate independently as a wholly-owned indirect subsidiary of Clarus and will constitute a third reporting segment associated with mobile solutions for outdoor adventure. The purchase consideration is comprised of $USD 150 million ($AUD 194 million) cash and approximately 2.3 million shares of Clarus common stock calculated pursuant to the terms of the purchase agreement.
Dick’s Sporting Goods announces new concept store in Knoxville
The second-ever Dick’s House of Sport store will open at Knoxville’s West Town Mall. Among the amenities at the groundbreaking concept store include: a 24,000 sq. ft. outdoor turf field and running track, a 40 ft. rock climbing wall, a batting cage for baseball and softball featuring HitTrax technology, golf hitting bays with TrackMan simulators, a putting green, an indoor turf soccer cage, a health and wellness destination to help athletes with recovery and well-being and a consolidated service area for breaking in gloves, stringing lacrosse sticks and building/repairing bikes.
Dick’s Sporting Goods earnings crush estimates as kids head back to team sports
Dick’s Sporting Goods reported fiscal first-quarter earnings and revenue that topped analyst estimates, saying kids returning to team sports boosted sales. Dick’s also raised its full-year financial outlook, citing building momentum. CEO Lauren Hobart said the retailer saw a resurgence in its team sports business during the quarter, as kids returned to activities following a year when many youth sports were canceled. The company also saw heightened demand in the golf category. Same-store sales surged 115% year over year, the company said, which included e-commerce growth of 14%. Digital sales accounted for 20% of total sales, up from 13% in 2019.
Cosmetics & Pharmacy
Reckitt Benckiser to Sell Scholl
Reckitt Benckiser Group (RB) is to sell Scholl to Yellow Wood Partners as part of its plans to “bring greater focus” to its portfolio. The business also reported strong full-year results. Scholl is a footwear and orthopaedic foot care brand which was founded in the early 1900s. RB chief executive Laxman Narasimhan said: “Under RB’s ownership, Scholl strengthened its position as the number one footcare brand worldwide and established a new global category. Dana Schmaltz, partner at Yellow Wood, added: “We are excited to reunite the Scholl brand globally to continue the legacy and heritage of the century old Dr. Scholl’s brand.
Ulta Beauty sales soar; earnings, revenue exceed pre-pandemic levels
Ulta Beauty started the year strong as sales jumped 65%, fueled by rising consumer confidence, stimulus checks, the easing of COVID-19 restrictions and returning store shoppers. The first quarter marked the beauty giant’s last quarter under the stewardship of Mary Dillon, who will turn the CEO baton over to Ulta president Dave Kimbell next week, after the chain’s annual shareholder meeting. Dillon will transition to the role of executive chair. On the company’s earnings call, Kimbell said that Ulta’s sales were strong across channels, with stores leading the way “as consumers were increasingly comfortable with shopping in stores.” “As local restrictions lifted, we increased our operating hours and welcomed brand partners back to stores, and as store traffic trends improved, we adjusted staffing levels to support the increased demand,” he said. Net sales increased 65.2% to $1.93 billion in the quarter ended May 1, topping Street expectations of $1.64 billion. By comparison, Ulta reported $1.74 net sales in the first quarter of 2019.
WBA, AmerisourceBergen complete Alliance Healthcare deal
Walgreens Boots Alliance’s sale of its Alliance Healthcare business is complete. AmerisourceBergen has paid a total consideration of $6.5 billion in cash and stock for the European pharmaceutical wholesaler. “We are excited to complete the acquisition and extend a warm welcome to the talented team at Alliance Healthcare,” AmerisourceBergen chairman, president and CEO Steven Collis said. WBA said it was using a portion of the funds from the sale to repay an outstanding amount owed on a $3.8 billion term loan that funded the bond tender it completed in April, eliminating $3.3 billion in debt from its balance sheet. It said the remainder of the net cash proceeds would go toward reducing debt and investments focused on growing its retail pharmacy and healthcare businesses. WBA highlighted its acquisition of a majority stake in pharmacy technology provider iA and its ongoing partnership with VillageMD to build 600 to 700 Village Medical at Walgreens clinics as examples of these investments.
Prestige acquiring Akorn’s consumer health brands
Prestige Consumer Healthcare is growing its portfolio with a $230 million acquisition to buy a group of over-the-counter brands from Akorn Operating. Among the brands being acquired is TheraTears, which makes up 80% of the acquired brands’ revenues, as well as four other brands in the VMS and cough-cold categories. “Prestige has a long and successful history in the eye care space highlighted by the iconic Clear Eyes brand,” said Ron Lombardi, chairman and CEO of Prestige Consumer Healthcare. “The acquisition of the proven TheraTears brand will further enhance this leading eye care franchise with additional long-term growth opportunities in the fast-growing ‘dry eye’ segment.”
Discounters & Department Stores
Target, Walmart announce overlapping sales events to rival Amazon
Target and Walmart are facing Amazon head-on, announcing longer sales events that both start on June 20 — a day earlier than Prime Day. On Wednesday, Target announced that its digital sales event, called Target Deal Days, will span three full days ending June 22. Consumers don’t need a membership to take advantage of deals across all categories, including food and beverage. Perks like same-day fulfillment and 5% off digital gift cards are also available. Walmart’s upcoming savings event, Deals for Days, features online and special store-only deals ending June 23, according to an announcement emailed to Retail Dive. The retailer said shoppers can find “Black Friday like savings” in multiple categories, including exclusive items and products from marketplace sellers.
Belk expands luxury accessory offering with ‘Sunnies at Belk’
Belk on Tuesday announced a new in-store sunglass concept called “Sunnies at Belk,” according to a company press release. The category expansion will bring hundreds of designer sunglasses to Belk.com and to three physical locations at Crabtree Valley Mall in Raleigh, North Carolina; Haywood Mall in Greenville, South Carolina; and SouthPark Mall in Charlotte, North Carolina. The regional department store already carries sunglass products from a number of brands including Coach, Michael Kors, Ralph Lauren and Ray-Ban, and will be adding luxury designers including Prada, Gucci and Versace.
Some U.S. consumers still have some of the government’s pandemic relief money left in their pockets; others have needed the federal boost just to pay their bills. Both kinds of shoppers prize a deal and are heading to off-price stores to find one. The off-price sector usually weathers challenges like economic downturns with relative ease. But several of the major chains in the space — Ross and Burlington and those run by TJX Cos. — were left to flounder during much of last year, having mostly or entirely rejected e-commerce as a viable sales channel. The supply chain issues that bedeviled a lot of retailers hit off-pricers especially hard.
Anne Klein debuts home collection with Macy’s
After a boom in the home space caused by the pandemic, Anne Klein has released a new home collection through Macy’s. The collection will be available on Macys.com and AnneKlein.com, the brand announced on Wednesday. The collection features four five-piece comforter sets priced between $190 and $250 that each include a comforter, two shams and two decorative pillows. A diamond quilt set with shams in navy or white is priced between $140 to $180. The bath collection, priced at $86, includes four different colorways of a six-piece cotton towel set: two bath towels, two hand towels and two wash cloths. The founder’s design archives and the gatherings she’s hosted at her various homes inspired the collection, per the announcement.
Emerging Consumer Companies
Bobbie, San Francisco-based infant formula brand, raises $15 million
Bobbie, a San Francisco-based infant formula company, announced a $15 million Series A raise. The investment was led by VMG. Bobbie was founded in 2018 and introduced products in January, 2021, surpassing $1 million in sales in the first quarter of 2021. Products are centered around a European-style recipe, organic infant formula and marketed to U.S. parents. Bobbie’s recipe is modeled after breast milk and designed to meet the most recent EU nutritional standards for critical ingredients like DHA and iron, while also complying with all FDA nutritional standards for infant formula.
New Stand, a New York-based physical retail concept, raises $40 million
New Stand, a modern news stand for building lobbies and communal office spaces, announced a $40 million Series B. The investment was led by Brookfield Property Group, with participation from existing investors Maywic, Fantail Ventures and Raga Partners. The investment brings the company’s total raised to just over $56 million since its 2015 inception.
Rent the Runway, the New York-based platform for designer dress and accessory rentals, is entering the resale market. Customers will soon be able to buy used designer clothes from the business in addition to renting them. No membership will be required, as the company looks to broaden its reach and give shoppers more feasible entry points. Previously, only paying members were able to buy gently used clothing. Last September, in another shift, it overhauled its subscription plans, sunsetting its unlimited option and moving to more simplified four-, eight- and 16-item plans. At the time, Rent the Runway raised another round of funding at a $750 million valuation, losing the billion-dollar unicorn status it had gained in 2019. The company has raised about $400 million to date. It recently named actress and Goop founder Gwyneth Paltrow to its board.
Grocery & Restaurants
Bezos-backed NotCo receives funding from Shake Shack founder Danny Meyer’s fund
The Chilean company NotCo, a plant-based food startup, announced on Wednesday that has received an investment from Enlightened Hospitality Investments (EHI), which counts Shake Shack founder Danny Meyer as a partner. EHI is a growth equity fund that invests in the hospitality, technology and consumer industries. The company did not disclose how much it received but said that the total raised so far is $130 million. This investment will be strategic for the unicorn wannabe to increase its ability to expand in the US foodservice market and operations in other countries. Danny Meyer now joins NotCo’s list of industry-leading investors, including Bezos Expeditions, Future Positive, and L Catterton. NotCo founder and CEO Matías Muchnick said in a press release that EHI’s experience and network, along with Meyer’s insights, will help drive aggressive expansion in U.S. food service in addition to existing successful partnerships with QSR leaders in Latin America such as Burger King and Papa John’s.
Private equity firm acquires Kodiak Cakes
Private equity firm L Catterton has acquired better-for-you food brand Kodiak Cakes for an undisclosed amount. Existing shareholders including Sunrise Strategic Partners, Trilantic North America and the company’s founders and management team will continue to own a significant minority stake in the business. Based in Park City, Utah, Kodiak Cakes offers an assortment of whole grain pancake and waffle mixes, frozen waffles and pancakes, oatmeal, baking mixes and snacking products. Products are sold in 26,000 doors nationwide.
Post completes $300 million SPAC deal
The initial public offering of Post Holdings Partner Corp. (PHPC) has closed with the sale of 30 million units at a price to the public of $10 per unit. The IPO pricing was announced by Post Holdings, Inc. as a special purpose acquisition company (SPAC). Post Holdings has said the SPAC will allow the company to partner with a business in the consumer products space. PHPC will be managed by Post’s management team, including Robert V. Vitale, president and chief executive officer of Post. Originally announced in February, the size of the SPAC was subsequently trimmed to $300 million from $400 million.
Home & Road
Lenox Corporation has acquired Oneida Consumer LLC, including all existing Oneida-branded flatware, dinnerware and cutlery, for an undisclosed sum, Lenox announced. The two companies, which are both owned by the private equity firm Centre Lane Partners but have been separate and independent of each other, will now serve as complementary brands in the Lenox Corp. portfolio, Lenox CEO Bob Burbank told HFN. Noting Oneida’s strength in the mid-tier specialty channel and in the hospitality business, Burbank said the acquisition gives each brand the opportunity to cross distribution channels where each is a leader and strengthens the company’s good/better/best assortment. Lenox acquired Hampton Forge, whose flatware business is strong in the warehouse and mass merchant channels, in January. It has been a busy year for Lenox. It closed its Kinston, N.C., factory at the beginning of the pandemic last year and was acquired by Centre Lane Partners in October. It acquired Hampton Forge in January and sold the Dansk brand to Food 52 last month. Burbank succeeded Mads Ryder as CEO in between the acquisition of Hampton Forge and the shedding of Dansk.
Hooker Furnishings Q1 sales up 56%
Hooker Furniture Corp. reported a 56% increase in consolidated net sales and net income of $9.4 million for its first fiscal quarter ended May 2, results it said have returned the company to a growth trajectory it experienced before the pandemic. Consolidated net sales totaled $162.9 million, compared with $104.6 million in the same period of 2020. Net income of $9.4 million or 78 cents per diluted share compared to a net loss of $34.8 million in the same period last year. The sales increase includes an 89% gain on the Hooker Branded side of the business and a 46% gain in its HMI segment, which includes Pulaski Furniture, Samuel Lawrence Furniture and Prime Resources International, among other brands in the hospitality segment. HMI also had operating income of $833,000, a gain of $3.3 million compared with the loss experienced during the pandemic-related shutdown last year. Jeremy Hoff, CEO, attributed the gains to “industry-wide high consumer demand for home products and dramatic improvements and expansions of product lines” throughout the company over the past two to three years.
Jewelry & Luxury
U.S. Platinum Jewelry Sales Rose Over 3% Last Year
U.S. platinum jewelry sales rose 3.4% in 2020 last year, according to the annual Platinum Jewelry Business Review from Platinum Guild International (PGI). This marks the seventh year in a row U.S. platinum jewelry sales have grown, and PGI expects to see similar modest growth over the next year. The first quarter has already seen robust sales, PGI said, “driven by a booming stock market, effective roll-out of vaccinations and improved economic conditions.” It also called 2020 holiday sales “relatively strong.”
How luxury brands can innovate online while maintaining white-glove appeal
On the outside, looking in. That is how it can sometimes feel for a marketer at a luxury brand, especially when so many digital innovations just don’t seem like the right fit for the white-glove customer experience that the brand stands for. But, for the luxury retailer, digital marketing is not about doing nothing or everything—there are valuable options in between. With a strong focus on consistent online customer experience, selective testing, and focusing on data and insights, luxury retailers can become digital powerhouses.
Is Luxury Ready for Double the Amount of Millionaires in China?
HSBC estimates that Chinese consumers are getting richer. The country will more than double its number of millionaires over the next five years. The middle class will also expand from about 340 million to over 500 million during that same period. “An expanding middle class will underpin medium to long-term economic growth, and stronger consumer spending boosts domestic demand, business confidence, and capital expenditure,” HSBC economists led by Qu Hongbin wrote. “A rising middle class will also increase imports of goods and services and attract foreign companies to invest in China.”
Office & Leisure
Blackstone, Starwood Capital raise offer for Extended Stay to $20.50 per share
Extended Stay America said on Tuesday Blackstone Group and Starwood Capital Group raised their buyout bid for the hotel operator by $1 per share, after a proxy adviser recommended shareholders vote against the $6 billion takeover offer. Under the deal, a joint venture between funds managed by the two companies will pay Extended Stay shareholders a total of $20.50 per share, up from a previous offer of $19.50 per share in March. “The $20.50 per paired share consideration represents the Blackstone/Starwood Capital joint venture’s best and final offer,” the companies said in a statement. The new bid comes a week after ISS said the deal terms of the previous $6 billion offer did not appear to be sufficiently compelling. The amended deal has been unanimously approved by the board of Extended Stay America. The deal is expected to close on June 16, the company said. Extended Stay specializes in economical temporary housing for healthcare professionals, and last year proved stronger than its peers even as bookings plunged across the U.S. hotel industry due to the pandemic.
Bought By Many, a pettech and insurtech scaleup, has secured an over €286 million Series D funding round through its holding company Many Group Ltd, one of the largest insurtech investments in Europe, securing a valuation of over €1.6 billion. The latest investment was led by EQT Growth, a European-based investment firm dedicated to unleashing growth in Europe’s technology champions. The funding round also includes participation from Willoughby Capital, alongside existing investors FTV Capital, Octopus Ventures, CommerzVentures and Munich Re Ventures. Founded in 2012, Bought By Many is best-known for introducing market-leading pet insurance and wellness policies, such as cover for pre-existing conditions, and was the first pet insurance provider in the UK to offer online claims. Bought By Many was also one of the first in the UK to offer customers free, unlimited access to video calls with registered vets, a lifeline for many pet parents throughout lockdown. Bought By Many operates under the brand name ManyPets in Sweden and the US.
Technology & Internet
Etsy is buying fashion resale app Depop for $1.62 billion
E-commerce firm Etsy announced Wednesday that it is buying the secondhand fashion app Depop for $1.62 billion. Founded in the U.K. in 2011, Depop lets people buy and sell used clothes through its online marketplace. The company has attracted a predominantly younger audience thanks to its social media savvy and messaging on environmental and ethical shopping. Depop boasts approximately 30 million registered users across 150 countries. Etsy CEO Josh Silverman said the company was “thrilled” to be adding what it believes to be the “resale home for Gen Z consumers” to Etsy. Depop will remain headquartered in London, Etsy said, operating as a standalone business run by current management. Prior to agreeing a sale to Etsy, Depop had raised a total of $105.6 million from investors including General Atlantic, Creandum, Balderton Capital, Octopus Ventures and Klarna CEO and co-founder Sebastian Siemiatkowski.
Amazon sued by DC attorney general on antitrust grounds
Washington, D.C., Attorney General Karl Racine announced Tuesday he’s suing Amazon on antitrust grounds, alleging the company’s practices have unfairly raised prices for consumers and suppressed innovation. Racine is seeking to end what he alleges is Amazon’s illegal use of price agreements to edge out competition; the lawsuit also asks for damages and penalties to deter similar conduct. The suit asks the court to stop what it calls Amazon’s ability to harm competition through a variety of remedies as needed, which could include structural relief, often referred to as a form of breakup. The lawsuit, filed in D.C. Superior Court, alleges Amazon illegally maintained monopoly power by using contract provisions to prevent third-party sellers on its platform from offering their products for lower prices on other platforms. The attorney general’s office claimed the contracts create “an artificially high price floor across the online retail marketplace,” according to a press release. The AG claimed these agreements ultimately harm both consumers and third-party sellers by reducing competition, innovation and choice.
Finance & Economy
Global inflation hasn’t been this high since 2008
Price are rising quickly across huge swaths of the developed world, with inflation in countries that belong to the Organization for Economic Cooperation and Development surging in April to the highest rate since 2008. The sudden arrival of inflation as economies reboot following the coronavirus pandemic is a major challenge for policymakers around the world. Rising prices are bad news for anyone on a fixed income, and central bankers may be tempted to combat inflation by hiking interest rates or paring back stimulus programs. Economists agree there is upward pressure on prices. But there is no consensus on whether rising inflation is a temporary phenomenon that will fade as economies and consumers adjust to life after the pandemic, or if price rises signal the start of a sustained trend with major implications for workers and companies.
U.S. economy adds 559,000 jobs in May, as the recovery shows signs of strength
The U.S. economy added 559,000 jobs in May, the latest sign of a strengthening recovery as vaccinations rise and covid restrictions ease nationwide. The unemployment rate dropped slightly from 6.1 percent to 5.8 percent, according to the monthly report, from the Bureau of Labor Statistics. The gains were driven strongly by jobs added at restaurants, bars and other food service establishments, which added 186,000 workers in the month. The categories of amusements, gambling and recreation, as well as hotels and accommodations also saw strong gains in May, adding 58,000 and 35,000 jobs respectively.
