US Retail Sales Increased in August Due to High Consumer Sentiment Index

Retail sales in the US rose 0.6% in August. It was the highest in last four months. The surge, combined with previous readings is regarded as an indicator of growth in this quarter.

Economists from the Wall Street Journal have earlier predicted 0.7% increase in retail sales in August. If auto sales are excluded, the surge was 0.5% in August. Total retail sales in August increased by 5% from the previous year.

What are the factors behind increased amount of shopping by US consumers? An increase in the recruitment drive, gains in the stock market and lower price of gas are some the factors. An economist called Gus Faucher said, “the consumer is in decent shape right now.”

Retail Sales

For automobile manufacturers and dealers, August proved to be a conducive month. Sales went up 1.5%, the best since March. Sales percentage rose 0.6% from the previous month. Figures indicate a huge number of Americans are purchasing automobiles. More than 17 million cars and light trucks were sold in August, which was highest since January 2006 when 16.4 million vehicles were sold. Data on automobile sales were collected from Ward’s Automotive Group.

The real estate industry seems to be recovering because the sale of building materials increased 1.4%, the highest since April. Sales of furnishing and appliance store products have seen an increase of 0.7%.

The Consumer Sentiment Index (CSI) of the University of Michigan was 81.8 in July. In August it rose to 82.5. The University of Michigan has attributed the increase to enthusiasm about jobs, better income and the higher income groups accruing increasing wealth.

But the optimism about employment has failed to realize. For last few months, the pace of recruitment drive was monumental. In August, however, it slumped. The same month, 142000 jobs were added by the employers. This is below one year average of 212000 jobs. The unemployment rate indeed slipped to 6.1% from 6.2%, but that’s chiefly because people who were already unemployed, stopped searching for job opportunities.

All in all, the data don’t indicate a very promising time ahead. However, renewed sentiment by customers is undoubtedly a positive sign.

Sources

http://www.bloomberg.com/news/2014-09-12/retail-sales-in-u-s-increased-in-august-by-most-in-four-months.html http://online.wsj.com/articles/u-s-retail-sales-rise-0-6-in-august-1410525105 http://abcnews.go.com/Business/wireStory/us-retail-sales-rise-august-auto-sales-25454357

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A+E Networks to Purchase Minority Stake of Vice Media for $250 Million

A deal is about to take place between A+E Networks and Vice Media Inc. The former will buy the 10% of the latter’s stake for a sum of $250 million. People with knowledge of this matter said the acquisition would value Vice Media at $2.5 billion.

A+E Networks is a TV programming company. It is owned by Walt Disney Co and Hearst Corp. The acquisition is not yet formally announced. The announcement might take place next week. The news is based on insider reports. The insiders gave the information on the condition of anonymity because they didn’t have the authorization to speak anything publicly.

A+E Networks

Interestingly, Vice Media was earlier in a negotiation with Time Warner. It didn’t realize and the relation between two parties went sour. Vice Media reportedly wanted more money than Time Warner was ready to pay. After hot water was poured on Time Warner and Vice Media negotiation, Time’s rival A+E Networks stepped in and offered Vice $250 million, which Vice reportedly has agreed to accept.

Vice is a youth-oriented media group. In 2013, 21st Century Fox invested $70 million in Vice. Fox bought 5% of the stake and Vice was valued at $1.4 billion. The opportunities that A+E Networks could explore from this acquisition are pretty much endless. The programming needs of A+E Networks could be met by Vice Media. Besides Vice Media needs money to gather news from far-fetched areas and on diverse domains.

Recently Vice Media has made a series on the terrorist organization called ISIS in Iraq and Syria and received from other media outlets. Some of the popular shows hosted by Vice Media are ‘Pawn Stars’ and ‘Ice Road Truckers’. The shows are cast on History Channel. The shows are viewed mostly by older audiences. Since Vice Media’s subscribers are youngsters, A+E Networks can penetrate into a new demographic.

Vice Media founded by Shane Smith 20 years ago. Smith is currently the CEO. It has been a long time since he wanted Vice to compete with television channels. The media group runs a magazine, a website and a film production studio.

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