Upgrade at Wal-Mart
Wal-Mart Stores Inc. is upping the ante on price matching.
The world’s largest retailer said Wednesday that it’s expanding its online tool that compares prices on thousands of products with those of some of its competitors to cities nationwide in the next few months. It also plans to offer thousands more products, from general merchandise like TVs and shirts to veggies and other produce, on the online tool that’s called Savings Catcher. And customers will also now be able to use Savings Catcher on Wal-Mart’s mobile app.
Wal-Mart rolled out Savings Catcher in seven markets in March, allowing customers to go to Walmart.com and compare prices of 80,000 grocery and household products at Wal-Mart with many of its competitors with physical stores. If the tool finds a lower price elsewhere, it refunds the difference to shoppers in the form of a store credit.
The discount behemoth is the latest retailer to aggressively court customers with a price-matching policy. Other stores, including Target and Best Buy, offer to match the lower prices of competitors. But those programs only offer to match competitors’ lower prices if shoppers do the research on their own, while Savings Catcher is designed to do the legwork for customers.
U.S. productivity fell even more than previously thought in the January-March period while labor costs rose at a faster pace.
Productivity, the amount of output per hour of work, declined at an annual rate of 3.2 percent in the first quarter, the weakest showing since the beginning months of the recession in 2008, the Labor Department reported Wednesday. Unit labor costs rose at a 5.7 percent rate, the fastest pace in more than a year.
Rising labor costs and falling productivity can be a cause for concern if they are an indication that inflation is worsening. But the first quarter performance was seen as a temporary bump caused by an unusually harsh winter which caused the economy to go into reverse. A strong rebound is expected in the current quarter.
Initially, the government reported that productivity fell at a smaller 1.7 percent rate in the first quarter. The initial estimate put the rise in labor costs at a 4.2 percent rate.
Service firms growing
U.S. service firms grew more quickly last month as production, hiring and new orders increased, adding to signs that the economy is accelerating after dipping at the start of the year.
The Institute for Supply Management said Wednesday that its service-sector index rose to 56.3 in May, the best reading since August 2013. The figure is an improvement from the 55.2 posted in April. Any figure above 50 indicates expansion.
The report points to solid growth after a brutal winter caused the economy to shrink 1 percent during the January-March quarter. The gains in new orders and the backlog of existing orders suggest a faster rate of hiring in the months ahead as businesses rush to meet the demand.
“With this level of activity and new orders in the pipeline, employment is going to have to come up,” said Anthony Nieves, chairman of the ISM’s services survey committee. “There is no way that companies will be able to sustain a good level of output if they don’t have the bodies to do it.”
Trade deficit jumps
The trade deficit ballooned in April to the widest in two years as Americans bought record amounts of consumer goods, business equipment and automobiles from abroad.
The gap grew by 6.9 percent to $47.2 billion from the prior month’s $44.2 billion, which was larger than previously estimated, Commerce Department figures showed Wednesday in Washington. The April reading exceeded all estimates in a Bloomberg survey of 70 economists and was the biggest since April 2012. Exports were little changed.
A rebound in U.S. growth after a harsh winter is likely to be driven by gains in consumer spending and business investment that will bolster imports. At the same time, slower expansions abroad will probably check gains in exports, keeping the trade gap elevated.
“The U.S. economy is expanding and so we’re pulling in imports from abroad,” said David Berson, chief economist at Nationwide Insurance in Columbus, Ohio, whose forecast for a deficit of $42.2 billion was the largest in the Bloomberg survey. “What was unexpected is that exports really didn’t move at all. This is a sign of relative weakness abroad...”
Insurer boosts dividend
UnitedHealth is once again hiking the quarterly dividend it gives shareholders by more than 30 percent, with the latest increase tripling the initial value of a payout the nation’s largest health insurer debuted in 2010.
The insurer said Wednesday it will pay a cash dividend of 37.5 cents per share on June 25 to stockholders of record as of June 16. That’s up nearly 10 cents from the Minnetonka, Minnesota, company’s current payout of 28 cents per share.
UnitedHealth Group Inc. became the first health insurer to offer more than a token payout to shareholders in 2010 when it started providing a quarterly dividend of 12.5 cents per share. The insurer has since increased that dividend 30 percent or more each year, as it stock price grew steadily.
The new dividend bumps the yield up to 1.9 percent from about 1.4 percent, based on the stock’s Tuesday closing price. The dividend yield is calculated by dividing the annual dividend by the company’s stock price.
Rates steady in Canada
The Bank of Canada kept its main interest rate unchanged with a neutral bias on its next move, saying the risks posed by low inflation remain.
The benchmark rate on overnight loans between commercial banks stayed at 1 percent, where it’s been since September 2010, as anticipated by all 21 economists in a Bloomberg News survey. Canadian and global economic growth were slower than expected in the first quarter while a weaker currency and higher energy costs are only temporarily boosting consumer prices, the bank said.
“Weighing recent higher inflation readings against slightly increased risks to economic growth leaves the downside risks to the inflation outlook as important as before,” policy makers led by Governor Stephen Poloz, 58, said in a statement from Ottawa today. Future economic data will determine “the timing and direction” of the next move, the bank said.
Economic growth slowed in the first quarter to the lowest in more than a year, adding slack to world’s 11th largest economy and giving Poloz room to maintain loose policy without inflation surging past his 2 percent target. Canada’s weaker dollar and stronger foreign demand will support the exports and investment needed for a recovery, the bank said.
“There’s nothing in here saying a move is imminent,” Paul Ferley, assistant chief economist at Royal Bank of Canada, said by telephone from Toronto. He predicts a rate increase in the second quarter of next year.
Star news services