Consumer spending up 5.6% in June
WASHINGTON — American consumers increased their spending in June by a solid 5.6 percent, helping regain some of record plunge that occurred after the coronavirus struck hard in March. But the virus’ resurgence in much of the country could impede further gains.
Last month’s rise in consumer spending followed a seasonally adjusted 8.5 percent surge in May after spending had plunged the previous two months when the pandemic shuttered businesses, caused tens of millions of layoffs and sent the economy into a recession. So deep was the pullback in the spring that even with two months of gains, consumer spending was still down at a record annual rate of 34.6 percent in the April-June quarter.
Friday’s Commerce Department report showed that the increase in June coincided with falling income levels. It was issued against the backdrop of a devastating economic collapse in the spring. The government estimated Thursday that the economy shrank at a dizzying 32.9 percent annual rate in the April-June quarter — by far the worst quarterly plunge on records going back to 1947 — as the viral outbreak shut down businesses, threw tens of millions out of work and sent unemployment surging.
Exxon lost $1B in 2Q as oil use dries up
NEW YORK — Exxon Mobil lost $1.1 billion in the second quarter, its economic pain deepening as the pandemic kept households on lockdown, diminishing the need for oil around the world.
The Texas-based oil giant brought in $32.6 billion in revenue during the second quarter, less than half of what it brought in at the same time last year.
The quarter was one of the worst on record for the oil industry. The price of a barrel of benchmark U.S. crude fell below $0 in April, a stunning downfall that had not before been seen in the industry. Producers had been pumping far more oil than the world was using as global travel all but shut down.
Oil prices have recovered somewhat, but they have been stuck at around $40 a barrel for weeks, which is well below what most producers need to make ends meet.
Exxon Mobil produced 3.6 million barrels of oil, down 7 percent from last year.
Wages, benefits grow at a slowing pace
WASHINGTON — Wages and benefits for U.S. workers rose at the slowest pace in three years in the April-June quarter, a sign that businesses are holding back on pay as well as cutting jobs in the coronavirus recession.
Pay and benefits increased 0.5 percent in the second quarter, down from 0.8% in the first three months of the year. Wages and salaries rose just 0.4 percent, while benefits jumped 0.8 percent.
Employers shed 22 million jobs in March and April before rehiring about one-third of those workers in May and June. That has left the unemployment rate at 11.1 percent, one of the highest rates since the Depression. With the unemployment rate so high, workers who still have jobs have less ability to resist pay cuts or demand raises.
Trader Joe’s won’t change label names
LOS ANGELES — Trader Joe’s, which indicated earlier this month it might change the names of some of its products after an online petition denounced them as racist, now says it will stick with labels like Trader Jose’s and Trader Ming’s for Mexican and Asian food.
“We want to be clear: we disagree that any of these labels are racist,” the popular grocery chain said in a statement posted on its website. It added, “We do not make decisions based on petitions.”
The petition posted on change.org by a high school student claims the names create “a narrative of exoticism that perpetuates harmful stereotypes.”
Other Trader Joe’s names cited include Arabian Joe for Middle Eastern food, Trader Giotto’s for Italian and Trader Joe San for Japanese cuisine.
After the petition was launched Trader Joe’s issued a statement saying it has been in the process of updating product labels and hoped to conclude that effort soon.
Merck turns a profit during vaccine hunt
FAIRLESS HILLS, PA. — Surging sales of its cancer medicines and reduced spending across the board helped Merck overcome a big hit from the coronavirus pandemic and increase its profit 12 percent to $3 billion in the second quarter.
The drugmaker boosted its financial forecast for the year Friday even as it spends heavily on the development of two experimental vaccines and a possible treatment for COVID-19. The results blew past expectations.
Merck said the pandemic kept many people away from doctors and veterinarians, cutting into sales for nearly all medicines produced by the company. Revenue fell 8 percent, to $10.87 billion.
However, sales of immuno-oncology blockbuster Keytruda and other cancer drugs rose, partly due to approvals for new uses or patient groups.
Merck said it now expects revenue for all of 2020 to range from $47.2 billion to $48.7 billion, and adjusted earnings per share of $5.63 to $5.78. That’s up from its April forecast of $46.1 billion to $48.1 billion in revenue and earnings per share of $5.17 to $5.37.