Thanksgiving online retail sales hit nearly $3 billion on the back of strong mobile growth

Retailers pushed Black Friday deals early and consumers became more comfortable making purchases on their cell phones this year.  Online shoppers in the US spent 2.9 billion on Thanksgiving, an 18 percent increase over the 2016 holiday total. 

Mobile phone users accounted for 29 percent of sales according to Adobe Analytics.  Thanksgiving in 2016 27 percent of online retail revenue was attributed to transactions made on cell phones.  

Commerce on smartphones continues to make headway as a share of overall online sales even as conversion rates (the percentage of website visitors who make purchase).

About 1.8 percent of smartphone visitors to shopping sites made a purchase on Thanksgiving. A 10 percent increase over the last year.  Compared to about 4 percent of tablet and desktop visitors to shopping sites.

The tablet and desktops are more likely higher because individuals will look up store locations and hours on their phone with no intention of making a purchase. Some websites are still difficult to enter credit card information to make online purchases on a cell phone. 

Mobile commerce will most likely continue to grow due to an increase in technology use.   Personally, I am deterred from going to the mall sometimes due to the lines and parking.  Online shopping is much easier because it can be shipped right to you and returned easily.  I am more inclined to order something online rather than going to the mall. 

https://www.recode.net/2017/11/24/16696602/thanksgiving-black-friday-2017-online-retail-sales-3-billion-adobe

Global wealth rises but millennials worse off

Although global wealth has risen rapidly and at a record rate over the past five years—by more than 6% in the one year from June 2016 to June 2017—the world’s people have not benefited equally from this increase.  In fact the rise in wealth overall has ended up making the divide between rich and poor wider in many cases, as described in an article in The Economist recently, “Global Wealth: Millennials’ Missing Millions.” The article summarizes findings from a study by the Credit Suisse Research Institute about global wealth trends and bringing attention to these disturbing trends.

Unfortunately the fact that wealth is in the hands of a few is one of the top findings in the report: the richest 1% of people in the world hold as much as half of the world’s wealth. Of course, the trends are different by country. There are more millionaires in the United States than anywhere else on earth: 43% of total millionaires, according to the report. Other developed countries have more millionaires than other places. But some emerging economies are also becoming home to a growing number of millionaires. Emerging economies are now home to more than 8% of all of the world’s millionaires.

What is also interesting in the study findings as reported by The Economist article is that some countries increased their share of global wealth in the last year much more rapidly than other countries because of changes in their currency exchange rates and performance of companies traded on their stock markets. These countries include South Africa, Poland, and Israel. This makes me wonder what will happen to the “wealth” increases these countries have enjoyed when their currencies depreciate or their stock markets decline? This does not seem to be a very stable or real form of increased wealth.

Another main finding of the Swiss study reported in The Economist is that adults ages 30-39 in the U.S. (older millennials) have gained 46% less wealth than people in this age group did ten years ago.  One likely cause of this according to the article is the high student debt levels that people in their thirties often still have in the U.S., which affects negatively their ability to save, buy a house and overall have a better quality of life. This seems to show that people in the U.S. are not “investing in the future” in a way that helps benefit the majority of people.

 

Credit Suisse Research Institute, Global Wealth Report 2017, November 14, 2017.

“Global Wealth: Millennials’ Missing Millions,” The Economist, November 16, 2017.

Growth of U.S Import Prices Slows

United States economists used past statistics to project a .4 percent increase in import prices for the month of October. However, these prices only increased by half of that at .2 percent. This followed a .7 percent increase in prices in the month of September. There are multiple factors that contributed to this decrease. Firstly, the prices of imported petroleum and imported capital goods both increased at a similar rate to previous months. Large decreases in the prices of imported food counteracted these increases and left overall prices at a decreased growth rate. At the same time, growth rates of exports remained constant.
These price changes could have positive and negative impacts on the US economy. Increasing import prices on capital goods will influence firms to invest more domestically, benefiting firms producing in the US. On the other hand, decreasing prices for imported food will hurt US agriculture and food production. This should also theoretically decrease growth of net exports as prices of imports are decreasing with no change in prices of exports.


https://www.cnbc.com/2017/11/16/us-import-prices-oct-2017.html

US Reduction in Skilled-Worker Visas

The Trump administration has recently made the process to get the H-1B visa (skilled-worker visa) much harder. Workers on these visas typically come from abroad to work for tech companies with in the United States. President Trump believes that this causes “unnecessary competition”. More immigrants coming on the H-1B visa will make skilled jobs a little more competitive especially in the tech industry but the Trump administration is failing to acknowledge all of the benefits H-1B visas bring to the United States.

            If a firm is only looking at the skills of people from the United States, they are potentially missing out on the skills in the world surrounding the United States. If there is a better fit for the position, even if it happens to be a foreigner, the company has the potential to be more productive and more innovative across the span of the career of the employee. In the scenario that a foreigner is the best fit for a job, and they are working on an H1-B visa then this will increase the United States’ GDP. The increase of the GDP would theoretically be the difference in the factor of productivity between the native born worker and the foreign born worker. Sure, this number is marginal for one worker compared to the US GDP, but if you factor in all the workers currently here on an H-1B visa, it has the potential to be a noticeable portion of the US GDP. Apart from the increase in GDP, there will be more consumption within the United States and more tax revenue.

            This program is not stopping the program completely, but slowing it down. Previously, approximately 20% of the H-1B applications were turned down, and with these new provisions it is expected that 25% or more will be turned down. On top of the estimated 5% raise in denials for the H-1B visas, one of the provisions in the new policy is to deny immediate family members of the applicants. This will not directly deny applicants but it will surely deter applicants from coming to the US to work, primarily for the newer tech companies.

            This policy has severe economic implications and the Trump administration could be hurting the US economy in the long run with these new policies.

Article found from print copy of The Wall Street Journal on November 20, 2017. (Front page, continued on A4).

The 'second-most' important job at the Fed will soon be vacant. Here's who may get it

With the New York Fed president, William Dudley, stepping down there is much speculation about who will become the next president of the FED.   This can have a serious affect on the economy.  Whoever will be elected will head the policy making of the monetary policy of the country, along with influencing interest rates and being able to change the federal funds rate. 

In the article the question is raised that should the person that will be elected have a PhD in Economics?  In my opinion the answer to that is yes.  Although one can learn through working in and the around the economy's inner workings can learn, I believe there is no substitute for a PhD.  This degree is a signal of understanding not only the basics of economic theory but having to know the ins and outs of the economy.

https://www.cnbc.com/2017/11/10/ny-fed-president-dudleys-replacement-likely-to-be-controversial.html