essay of economic indicators

Economic Indicators Types and Interpretation Essay

Introduction, interpretation of each indicator.

Economic indicators show the statistic of an economy. They are used to analyze the economic performance of a country. Besides, they are used to predict future performance. Another use of economic indicators is to study the business cycle in the economy. That is, they can tell whether an economy is at recession, boom, or recovery. Based on timings, economic indicators can be categorized into three. These are coincident, leading, and lagging indicators. Some of the economic indicators include gross domestic product, employment rate, stock market prices, consumer price index, and industrial production (The Federal Reserve Bank of Minneapolis, 2012).

Leading indicators

Reflectively, “leading indicators change before changes in the economy are felt” (“The Conference Board: Business Cycle Indicators Handbook”, par. 4). That is, they change direction in advance before the business cycle. Some of the leading indicators include average weekly hours, stock prices, interest rate spread, housing permits, new orders, and consumer expectations. In as much as the indicators are given much attention in the economy, they are meaningful when used within the framework of lagging and coincident.

Lagging indicators

In the ideal situation, “lagging indicators change after the economy as a whole does” (“The Conference Board: Business Cycle Indicators Handbook”, par. 8). They change direction after coincident indicators. These lags usually occur after a quarter of a year. Therefore, they are not beneficial for economic analysis and are often ignored. In some instances, they help to confirm the movements of leading and coincident indicators. In addition, the series help to warn us of structural imbalances growing within the economy. For instance, “represent costs of doing business, such as inventory-sales ratios, change in unit labor costs, and the average prime rate charged by banks” (The Conference Board, 1999)

Coincident indicators

Coincident indicators provide information about the current state of the economy. They are expansive series that measure aggregate economic movement. This is because they change approximately concurrently as the whole economy. Some of the coincident indicators are trade sales, production, employment, manufacturing, and personal income.

The Principle Federal Economic Indicators are “Consumer Price Index, Employment Cost Index, The Employment Situation (which includes the unemployment rate and payroll employment), Producer Price Indexes, Productivity and Costs, Real Earnings, U.S. Import and Export Price Indexes” (United States Department of Labor, 12). The table below summarizes the statistics for some of the economic indicators.

Table 1.0 Statistics for economic indicators.

Stock prices 500 common stocks

This indicator shows the price movement of a variety of stock traded in New York Stock. Movement of this stock shows general sentiments of investors and the movement of interest rates.

Money supply, M2

M2 “is inflation-adjusted money supply which comprises of demand deposits, currency, savings deposits, and traveler’s checks” (“The Conference Board: Business Cycle Indicators Handbook”, par. 12). The money supply in the economy determines interest rates. This, in turn, determines the level of investment in the economy.

Personal income less transfer

This gives data for the aggregate amount of income individuals receive. They are inflation-adjusted dollars. The income levels are important because they determine aggregate spending and state of the economy.

The average duration of unemployment

This indicator measures the average period in weeks a person is not at work. This index gives the amount of idle human resources in the economy.

The Conference Board: Business Cycle Indicators Handbook . (1999). Web.

The Federal Reserve Bank of Minneapolis: The Federal Reserve’s Beige Book: A better mirror than crystal ball . (2012). Web.

United States Department of Labor: Bureau of Labor Statistics . (2010). Web.

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3. industrial production, 4. consumer spending, 5. inflation, 6. home sales, 7. home building, 8. construction spending, 9. manufacturing demand, 10. retail sales, the bottom line.

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Top 10 U.S. Economic Indicators

Understanding the state of the economy can help investors make decisions

In addition to company and industry data, the state of the overall economy can provide insight to investors for their decision-making. For instance, when considering whether to invest in a company that depends on consumer spending, it's useful to know whether the economy faces a recession.

Economic indicators provide information about an economy and whether it is expanding or contracting. Most indicators are released monthly by government departments and agencies. They typically report on activity in the previous month and year for comparison purposes.

Read on for 10 important U.S. economic indicators that investors watch.

Key Takeaways

• Individuals who measure economic activity and predict future trajectories rely on the analysis of key pieces of macroeconomic data.
• Known as economic indicators, these data quantify various aspects of an economy.
• Economic indicators measure everything from economic growth to changes in prices to unemployment.
• Markets can move to news about key economic indicators.
• Information provided by economic indicators can help people make decisions about their investments.

The gross domestic product (GDP) of an economy provides the overall value of the goods and services that the economy produces and indicates whether it is growing or slowing.

The Department of Commerce’s look at the quarterly change in GDP breaks down the activity into changes in consumer spending, business investment, and government spending, as well as the net impact of foreign trade. The government puts out a preliminary first estimate, updates with a revised second reading as it gets more input, and then delivers a third and final report.

The Department of Labor puts out a monthly release on employment that includes the number of jobs created the previous month by the private sector, the government, and some specific industries, as well as the national unemployment rate. Low unemployment can point to a strong economy, but can also predict rising inflation.

The U.S. unemployment rate as of February 2024 was 3.9%.

Industrial production is a measure of the output of manufacturing-based industries, including those producing goods for consumers and businesses. This monthly release from the Federal Reserve also reports on capacity utilization in the factory sector.

Consumer spending accounts for two-thirds of U.S. gross domestic product and is a good gauge of consumer spending health. The Department of Commerce’s monthly release on personal income and outlays provides data on consumer spending. It also provides information on inflation through a price index that reflects changes in how much consumers have to spend to buy certain items.

Consumer spending represented 67.7% of GDP as of Q4 2023.

Inflation is the general price level rise of goods and services in an economy. Too much inflation can mean the economy is overheating while very low inflation can be a harbinger of economic recession.

Depending upon the selected set of goods and services used, multiple types of inflation values are calculated and tracked as inflation indexes. The most commonly used inflation indexes are the  Consumer Price Index (CPI) and the  Wholesale Price Index (WPI) . The Producer Price Index (PPI) is also used to measure inflation as it relates to producers.

Home sales represent a major purchase for most people. Thus, the Census Bureau's monthly report on new residential sales speaks to consumer sentiment. This report, based on contracts to buy new homes, provides input on sales of single-family homes regionally and nationally. It also reports on median and average sales prices.

The National Association of Realtors (NAR) , a private realty trade association, puts out a monthly report on sales of existing homes, based on closed sales.

The number of houses that builders started working on, as well as the number of permits that they obtained to start building houses, indicates real estate developers’ confidence level in the economy. The Census Bureau’s monthly release on new residential construction provides this regional and national information.

The U.S. Census Bureau is part of the U.S. Department of Commerce.

Another construction-based indicator is the change in monthly construction spending, in dollars, nationally. This spending encompasses various construction-related expenses, such as labor and materials and engineering work. The Census Bureau's report provides a breakdown of residential and nonresidential public and private construction.

The report on manufacturers’ shipments, inventories, and orders gives an indication of demand for manufactured items. The Census Bureau issues a preliminary monthly report and a more lengthy report as a follow-up. Both break down manufactured goods by many types and industries, from electronic instruments to machine tools to nondurable consumer goods.

The Census Bureau’s monthly release on retail and food services sales is an indication of consumer spending health. This report shows retail sales in various sectors, such as department stores, furniture stores, and home furnishing stores.

What Is an Economic Indicator?

It's a metric that's generated by the collection of information about certain parts of an economy . Economic indicators can provide insight into overall economic health. They help policymakers, such as government employees and Federal Reserve board members, determine a course of action for the economy, as well as assist investors in their investment choices.

Where Can I Find Economic Indicators?

Various departments and agencies of the U.S. government release reports on U.S. economic indicators. These sites include the Census Bureau, the Bureau of Labor Statistics, and the Bureau of Economic Analysis. In addition, business and market publications and websites typically issue economic indicator news upon its release.

Is a Macroeconomic Indicator the Same As an Economic Indicator?

Yes. You'll see both terms used. Macroeconomics is a branch of economics that focuses on the larger view of the economy, such as markets, businesses, and consumers. Individual indicators that reflect different areas of the economy such as GDP, inflation, and unemployment, all parts of macroeconomics, help people assess the behavior of the overall economy.

No one key indicator paints a complete picture of the state of the economy. However, a combination of indicators—such as the top 10 key economic indicators described above—can be used to inform a variety of economic and investment decisions.

Bureau of Economic Analysis. " U.S. Economy at a Glance ."

U.S. Bureau of Labor Statistics. " Current Employment Statistics ."

U.S. Bureau of Labor Statistics. " The Employment Situation ."

The Federal Reserve. " Industrial Production and Capacity Utilization ."

Bureau of Economic Analysis. " Consumer Spending ."

Federal Reserve Bank of St. Louis. " Shares of Gross Domestic Product: Personal Consumption Expenditures ."

U.S. Bureau of Labor Statistics. " When Did the Wholesale Price Index Become the Producer Price Index? "

U.S. Bureau of Labor Statistics. " Major Economic Indicators ."

U.S. Census Bureau. " Monthly New Residential Sales ."

National Association of Realtors. " Existing-Home Sales. "

U.S. Census Bureau. " Monthly New Residential Construction ."

U.S. Census Bureau. " Monthly Construction Spending ."

U.S. Census Bureau. " Manufacturers' Shipments, Inventories, & Orders ."

U.S. Census Bureau. " Monthly Retail Trade ."

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Economic Indicators And Wal-Mart Strategy Essay

Type of paper: Essay

Topic: Customers , Strategy , Business , Social Issues , Unemployment , Walmart , Money , Economics

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Published: 12/23/2019

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Economic Indicators and Wal-Mart Strategy Introduction

Any business entity operates within a specific economic environment that significantly impacts its success and strategies. Thus, it is imperative for any organisation to conduct an in-depth analysis of its economic situation for successful strategy formulation. Economic indicators present a broad overview of an economy’s well-being. They are statistics about specific aspects of an economy, like unemployment rate, gross domestic product, consumer spending and inflation rate. These indicators not only reflect the health of an economy, but also serve as specific inputs to organizations to devise their investing strategy. This process of strategy formulation is understood taking an example of Wal-Mart as an organization. The objective of this paper is to identify economic indicators that are relevant for Wal-Mart and explain why. Based on this analysis, the paper also attempts to outline a strategy for Wal-Mart with a goal to maximize revenue in future. The paper is divided into three sections. The first section of the paper identifies and analyses economic indicators that are relevant for Wal-Mart. The second section outlines a strategy for Wal-Mart to maximize its revenue. The third section concludes the paper.

Analysis of Economic Indicators

Some of the key economic indicators that are relevant for Wal-Mart are gross domestic product, consumer spending, unemployment rate, industrial production, consumer price index, money supply and consumer credit. The relevance of these economic indicators for Wal-Mart is discussed in this section.

Gross Domestic Product (GDP)

GDP is essentially the market value of all the goods and services that are made within a country during one year (A. Dawn Journal, 2010). It measures economic output of a nation; hence, it is a vital statistic in determining the economic health of a country. The United States reports world’s highest GDP, which is expected to grow at a rate of two per cent (Rapoza, 2012). The outlook of GDP growth in the United States is modest given the weakening of mortgage market, risk aversion due to global crisis and low global demand. This can also be attributed to reduced government spending. GDP is a pro-cyclical and coincident economic indicator (Moffatt, 2012). It is pro-cyclic because its movement, its peaks and its troughs are in the direction of economy. It is coincident because its movement is at the same time as that of the economy. GDP, as an economic indicator, is important for Wal-Mart as it helps estimate growth rate for the company. It also gives business outlook to the company. If outlook is positive, companies can invest further in infrastructural development. GDP also suggests standard of living of a nation. Higher GDP is usually associated with better standard of living.

Consumer Spending

Consumer spending is the sum total of consumption expenditure of all households in an economy. Like GDP, consumer spending is also pro-cyclical and coincident. Hence, consumer spending has also been impacted because of economic slowdown. The consumer spending is stalled in the United States and significant drop in household sentiments is reported (Kowalski, 2012). Uncertainty in the market conditions increase consumer propensity to save, rather than spending. Consumer spending, as an economic indicator, is important for Wal-Mart as it indicates consumer’s propensity to spend. If consumers are inclination to spending, the company can invest in expansion plans and earn profits.

Unemployment Rate

Unemployment rate is defined as the ratio of the unemployed workforce to total workforce, as a given point in time. Unlike GDP, it is a lagged and counter-cyclical statistic (Moffatt, 2012). It is a lagged indicator as it responds slowly to changes in economy. It is counter-cyclical because its direction of movement is opposite to economy’s direction of change. Thus, with an economic slowdown, unemployment rate increases gradually. Unemployment rate in the United States is stuck at over 8% for the longest stretch since 1948 (Zhang, 2012). Unemployment rate is an important indicator for Wal-Mart for two reasons. First, it directly impacts consumer spending. Low wages mean low consumer spending. Second, it can reduce a company’s manpower cost by downside wage corrections to market standards.

New Construction

New construction includes construction of new houses in an economy. This is a pro-cyclical leading economic indicator (Moffatt, 2012). Since it is a leading indicator, it is closely monitored by businesses. An upsurge in the demand for houses is a good indicator of improved economic health in near future. Thus, it is a relevant indicator for devising Wal-Mart strategy.

The construction of residential houses is showing a gradual upward trend since the end of the 2009 in the United States. A housing index developed by National Association of Home Builders of the US, that incorporates factors like the number of house sales, the expected sales in next six months and traffic of potential buyers, has been increasing since November 2011 (Economics and Statistics Administration, 2012).

Consumer price index (CPI)

CPI index is an indicator of inflation rate as it measures price changes in a basket of consumer goods and services. The information provided by this indicator is important for devising strategy for Wal-Mart in multiple ways. First, it helps companies in adjusting their estimated future profits against expected inflation rate. Second, it helps predict government’s fiscal and monetary policies. Third, it helps companies forecast their inflation-adjusted growth rates. The CPI for urban customers for April and May 2012, adjusting for seasonality, are 0% and -0.3% respectively (Bureau of Labor Statistics, 2012). This depicts a favorable scenario.

Money supply

As the name suggests, money supply is the total money in circulation as a given point in time in a given economy. It is another indicator of consumer confidence in the economy. The supply of money in the United States is showing an upward trend since the mid of 2010, which is a positive movement. It is a leading economic indicator, hence helps predict future economic scenario.

Consumer credit

Consumer credit is a lagging indicator and measures the amount of loan financed to households for purchase of consumer goods. The indicator is important for Wal-Mart as it depicts availability of funds with consumers to spend on purchase of consumer goods. Total consumer credit in the United States is also growing, after a dip that was noticed in 2009. This is a favorable scenario. Outline of Wal-Mart’s Strategy

The analysis of information on economic indicators depicts that the economy is recovering from slowdown and moving towards expansion phase. Money supply and new construction are leading economic indicators. The housing index and supply of money in the economy are showing positive trend. The lagging indicators like consumer credit and price index are also showing favorable economic trends. However, consumer spending and unemployment rate are two inter-related economic indicators that are still not showing favorable signs.

The proposed strategy of revenue maximization for Wal-Mart has three important elements. First, Wal-Mart needs to expand in unchartered territories. Since, consumer spending is stalled; expansion strategies in existing markets will not yield results. It would be easier for Wal-Mart to compete with small retail shops in smaller towns and attract customers. Given the high unemployment rate, optimum wage rates can be decided to earn profits. The positive outlook of economy also supports further investments for expansion. Second, since the consumers currently have a propensity to save rather than spend, it is important to build marketing campaigns that focus on low daily prices on necessity products vis-à-vis competitors. Third, Wal-Mart needs to make arrangements with its suppliers to store products based on customer demand, rather than relationship with suppliers. This will help reduce inventory cost and avoid loss of sales due to unavailability of necessity products. Fourth, rather than having a bog store, Wal-Mart should focus on starting larger number of small stores for its expansion as it will be easier for people to travel to the stores.

The information from economic indicators cannot be interpreted in isolation. Each economic indicator conveys a piece of jigsaw puzzle and putting all the pieces together completes the picture. Thus, while some indicators convey that economy is slow, others display a positive outlook of economy in future. Summing up, the indicators reveal that the economy is trying to recover from recession and is moving towards expansion. This is a favorable for future investment. Hence, expansion strategy has been outlined for Wal-Mart to increase its revenue. Considering the low level of consumer spending, expansion in untapped smaller towns is suggested.

A. Dawn Journal (2010). What is GDP (Gross Domestic Product)? Retrieved from http://adawnjournal.com/2010/03/20/what-is-gdp-gross-domestic-product/ Bureau of Labor Statistics (2012). Consumer Price Index. Retrieved from http://www.bls.gov/cpi/ Economics and Statistics Administration (2012). Economic Indicator: New Residential Construction up in January 2012. Retrieved from http://www.esa.doc.gov/Blog/2012/02/16/economic-indicator-new-residential-construction-january-2012 Kowalski, Alex (2012). Consumer Spending In U.S. Stalls As Hiring Weakens: Economy. Retrieved from http://www.bloomberg.com/news/2012-06-29/u-s-consumer-spending-unchanged-in-may-weakest-in-six-months.html Moffatt, Mike (2012). Some Important Economic Indicators: a Beginner’s Guide to Economic Indicators. Retrieved from http://economics.about.com/cs/businesscycles/a/economic_ind_2.htm Rapoza, Kenneth (2012). IMF cuts U.S. growth forecast, Cites Smaller Gov’t. Retrieved from http://www.forbes.com/sites/kenrapoza/2012/07/03/imf-cuts-u-s-growth-forecast/ Zhang, Moran (2012). US Unemployment Rate Likely To Hold At 8.2% In June, With Little Job Growth Improvement. Retrieved from http://www.ibtimes.com/articles/358979/20120703/unemployment-rate-june-nonfarm-payroll-job.htm

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• / Miscellaneous

Economic Indicators

By: Steve   •  Essay  •  536 Words  •  November 28, 2009  •  1,153 Views

Essay title: Economic Indicators

For the individual who watches CNN a great deal, the term Economic Indicators well recognized. However, for the individual who chooses not to make CNN a primary station, the term Economic Indicators can be extremely confusing. Economist often use very unlike terms when referring to the fluctuating economy. Economic Indicators happens to be one of the many terms that they use. So, what exactly are Economic Indicators, and what purpose do they serve? In addition to the previous stated questions, are they really that important?

Economic Indicators serve the purpose of spying on the economy, let me further elaborate. Economic Indicators are economic statistics. Examples of economic indicators are unemployment rates, GDP, and even the inflation rate. These so called Economic Indicators inform Economist how well, or how bad the economy is doing. By revealing the present state of the economy, the indicators allow economist to predict how well the economy will do in the future. Economic Indicators are very necessary. The levels of investments are contingent upon what Economic Indicators suggest. For example, if Economic Indicators suggest that the economy is going to do better or worst than the past, individuals may choose to change previous investment plans. As stated previously, economist and investors are dependent upon Economic Indicators.

There are three different types of relationships that Economic Indicators have with the economy. These three relationships of Economic Indicators should not be confused with the three types of Economic Indicators. Beginning with the types of Indicators, they can be classified as leading, lagging, or contemporaneous also called coincident. First, leading indicators are those that change ahead of the economy. This means that the leading indicators change before the economy. A good example of a leading indicator, which also will be used later on, is stock market returns. The stock market declines before it is evident in the economy and

SOUTH AFRICA'S ECONOMIC AND SOCIAL INDICATORS GRADE 12 NOTES - ECONOMICS STUDY GUIDES

• Key concepts
• The performance of an economy
• Economic indicators
• Social indicators
• International comparisons

Economic and social indicators are useful tools to determine a country’s well-being. There are many economic and social indicators, including production, employment, education and demographic indicators. Overview

11.1 Key concepts

These definitions will help you understand the meaning of key Economics concepts that are used in this study guide. Understand these concepts well.

Use mobile notes to help you learn these key concepts. Learn more about mobile notes on page xiv in the introduction.

11.2 The performance of an economy

When we assess the economy, there are a few things that should be considered:

• Performance Economic indicators are used to establish the state of the economy. An economic indicator is a statistic (data) that shows the behaviour of one or other variable.
• Comparisons Changing statistics (data) inform us of changes in the economy. By comparing these changes we can determine whether there is a growth or slowdown in the economy.
• Specifications To be meaningful, indicators have to be compiled in terms of their rules of compilation.
• Purposes Indicators are compiled for specific purposes. Example, the CPI is calculated to show increases in consumer prices and reflect the cost of living.

11.3 Economic indicators

11.3.1 Price change indicators Price increases occur either because of scarcities of a product or changes in consumer preferences. Price increases over long periods of time are known as inflation. There are two key price change indicators:

• Producer Price index (PPI): This is the indicator used to measure an increase or decrease over time in the prices of goods produced locally when they leave the factory floor; and an increase or decrease in the price of imported goods.
• Consumer Price index (CPI): Weights are obtained from the expenditure of households and show changes in the purchasing power of the rand. This is the official index used in inflation targeting.

11.3.2 Foreign trade indicators International trade is important in a globalised world. Exports stimulate employment and imports widen the choice of consumers.

• Terms of trade: The ratio of export and import prices. If the ratio deteriorates (gets worse), a greater volume of exports must be produced that may cause a spill-over effect into the balance of payments.
• Exchange rate: The value of one country’s currency in relation to another country’s currency.

11.3.3 Employment indicators

• The economically active population (EAP): The labour force between15 – 65 years of age.
• Employment: The number of employed persons as a percentage of the economically active population (EAP), e.g. 73.5% in South Africa.
• Unemployment: The unemployed (who are actively looking for work) as a percentage of the economically active population.

11.3.4 Productivity indicators Labour productivity is watched very closely, particularly in relation to real wage increases.

• Labour productivity: This is measured by dividing the real GDP by the number of workers employed.
• Remuneration per worker: If productivity increases are lower than the real wage increases, inflationary pressures will occur.

11.3.5 Interest rates Interest is the charge made for borrowing money.

• Repo rate is one of the most important interest rate indicators. It is the rate at which the SARB lends money to banks.

11.3.6 Money supply The supply of money is controlled by the SARB. The money is classified in three categories.

• M1: notes and coins in circulation and demand deposits of the domestic private sector at banks.
• M2: M1 plus other short term and medium term deposits of the domestic private sector at banks.
• M3: M2 plus long term deposits of the domestic private sector at banks.

11.4 Social indicators

Social indicators are concerned with people. They monitor identifiable and definable issues related to human well-being over a period of time.

11.4.1 Demographics The size of the population is important for infrastructure and social programmes.

• Population growth: The population numbered 46.8 million in 2005. Growth is slowing down. Measuring population growth is important for delivering social services and for identifying the size of the tax base (the total number of people paying taxes).
• Life expectancy: South Africa’s life expectancy rate is down from 62,8 years to 47 years.

11.4.2 Nutrition and Health The standard of living of the population is related to the quality of nutrition and health: Nutrition

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• SOUTH AFRICA'S ECONOMIC AND SOCIAL INDICATORS QUESTIONS AND ANSWERS
• ENVIRONMENTAL SUSTAINABILITY QUESTIONS AND ANSWERS GRADE 12
• TOURISM INFLATION QUESTIONS AND ANSWERS GRADE 12
• INFLATION QUESTIONS AND ANSWERS GRADE 12
• SOUTH AFRICA'S INDUSTRIAL POLICIES AND THEIR SUITABILITY IN TERMS OF INTERNATIONAL BEST PRACTICE QUESTIONS AND ANSWERS GRADE 12
• ECONOMIC GROWTH AND DEVELOPMENT QUESTIONS AND ANSWERS GRADE 12
• THE REASONS AND CONSEQUENCES OF MARKET FAILURES QUESTIONS AND ANSWERS GRADE 12
• THE DYNAMICS OF IMPERFECT MARKETS QUESTIONS AND ANSWERS GRADE 12
• Child malnutrition: Malnutrition is expressed in two ways – weight for age (under weight) and height for age (dwarfism). The proportion of underweight children is the most important indicator of malnutrition.
• Overweight children: there is an association between obesity of children and other diseases.
• Infant mortality: The number of children that will die before one year of age is one way of measuring the health of a population.
• Under-five mortality: the number of children that will die before the age of 5 years.
• Health expenditure: the amount of health expenditure as a percentage of GDP.
• Access to safe drinking water: the percentage of a population that has reasonable access to safe drinking water.
• Access to sanitation facilities: the percentage of a population with at least adequate sanitation facilities that can prevent human, animal and insect contact.

11.4.3 Education The standard of living is related to the level of education. Education is a key social indicator:

• Public expenditure: The percentage of the national budget that is directed towards education.
• Secondary enrolment: This shows the percentage of an age group attending high school.
• Primary completion: The percentage of an age group that has completed primary education is an indicator of the efficiency of the education system.
• Youth literacy rate: The percentage of the 15–24 age group that are literate.

11.4.4 Services A number of services that are vital to enhance people’s lifestyle and level of economic and social development:

• Electricity
• Refuse removal
• Water supply

11.4.5 Housing and urbanisation The standard of living of the population is related to the quality of their housing and services: Housing

• Housing: Many South African citizens are poor and cannot afford property. The government supplies housing subsidies and the private sector provides housing loans.

Urbanisation The level of urbanisation is one of the indicators of a country’s social development. It is measured by:

• Natural growth of the urban population
• Establishment of new towns

11.5 International comparisons

International comparisons are the key means of measuring a country’s economic and social development. 11.5.1 Globalisation

• International trade: Payments are affected by the exchange rate.
• Internationalisation: Branch offices in foreign countries monitor indicators to publish financial reports in a single currency and pay dividends in different currencies.

11.5.2 International standardisation

• Economic and social indicators are useful. International organisations, like the World Bank and the IMF, are very specific in determining, utilising and applying these indicators.
• Benefits from organisations cannot be measured if indicators are not available, e.g. bridging finance from the IMF, World Bank and the UN.

11.5.3 Aid and support

• Foreign countries, governments, international institutions and NGOs are globally involved in providing financial aid.
• A country needs indicators, including domestic income, production and expenditure, poverty, education and health data, to receive aid and to measure the impact of this aid.
• Human rights (children’s rights), environment (pollution) and governance (corruption) indicators might also be requested by aid organisations.

11.5.4 Comparison and forecasting

• Capital markets are liberated through globalisation.
• Capital moves where it receives the best returns.
• Publications for global players give indicator values for the 3 previous and 3 future years to spot underlying trends.

Learn these four points that are used by international organisations to measure a country’s level of economic and social development. Activity 1 Choose the correct word between brackets:

• The key rate of interest in SA is the (repo/exchange) rate. (2)
• The growth performance of a country is measured in terms of the (per capita real GDP/increase in the real GDP). (2)
• The economically active population is the labour force between 15 and (55/65) years of age. (2)
• The index used to determine the prices of inputs is called the (consumer/producer) price index. (2)
• Social indicators are concerned with people, such as education and (corruption/health). (2) [10]

Activity 2 Give ONE answer for each of the following:

• An international bank established to promote economic recovery and development (2)
• Used to establish the performance of the economy in terms of basic economic objectives of growth, price stability, exchange rate stability and full employment (2)
• It is depicted in the Lorenz curve and shows the distribution of income (2)
• The price of one country’s currency in terms of another country’s currency (2)
• Ratio of export and import prices (2) [10]

Activity 3 Distinguish in tabular form between the Consumer Price Index and the Producer Price Index. (2 × 4) [8]

Answers to activity 3

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Key economic indicators in South Africa- statistics & facts

A trade deficit, controlling inflation and the job market, the pandemic impact on businesses, key insights.

Detailed statistics

Gross domestic product (GDP) in South Africa 2029

Gross domestic product (GDP) per capita in South Africa 2029

Gross domestic product (GDP) growth rate in South Africa 2029

Editor’s Picks Current statistics on this topic

Current statistics on this topic.

South Africa

National debt of South Africa 2029

South Africa's budget balance in relation to GDP 2029

National debt of South Africa in relation to gross domestic product (GDP) 2029

Related topics

Recommended.

• Key economic indicators of Tunisia
• Key economic indicators of Algeria
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• Key economic indicators of Tanzania
• Key economic indicators of Zanzibar

Recommended statistics

Gross domestic product.

• Basic Statistic GDP of African countries 2022, by country
• Basic Statistic Gross domestic product (GDP) in South Africa 2029
• Basic Statistic Gross domestic product (GDP) per capita in South Africa 2029
• Basic Statistic Gross domestic product (GDP) growth rate in South Africa 2029
• Basic Statistic Gross domestic product (GDP) distribution across economic sectors South Africa 2022

GDP of African countries 2022, by country

African countries with the highest Gross Domestic Product (GDP) in 2022 (in billion U.S. dollars)

South Africa: Gross domestic product (GDP) in current prices from 1989 to 2029 (in billion U.S. dollars)

South Africa: Gross domestic product (GDP) per capita in current prices from 1989 to 2029 (in U.S. dollars)

South Africa: Real gross domestic product (GDP) growth rate from 2019 to 2029 (compared to the previous year)

Gross domestic product (GDP) distribution across economic sectors South Africa 2022

South Africa: Distribution of gross domestic product (GDP) across economic sectors from 2012 to 2022

• Premium Statistic Trade balance of goods of South Africa 2022
• Premium Statistic Import of goods to South Africa 2022
• Premium Statistic Export of goods from South Africa 2022
• Premium Statistic Distribution of goods imported into South Africa 2022, by category
• Premium Statistic Import value of goods into South Africa 2022, by category
• Premium Statistic Export value of goods from South Africa 2022, by category

Trade balance of goods of South Africa 2022

South Africa: Trade balance of goods from 2012 to 2022 (in billion U.S. dollars)

Import of goods to South Africa 2022

South Africa: Import of goods from 2012 to 2022 (in billion U.S. dollars)

Export of goods from South Africa 2022

South Africa: Export of goods from 2012 to 2022 (in billion U.S. dollars)

Distribution of goods imported into South Africa 2022, by category

Distribution of main goods imported into South Africa in 2022, by category

Import value of goods into South Africa 2022, by category

Import value of main goods into South Africa in 2022, by category (in billion U.S. dollars)

Export value of goods from South Africa 2022, by category

Export value of main goods from South Africa in 2022, by category (in billion U.S. dollars)

Inflation and prices

• Basic Statistic Inflation rate in South Africa 2028
• Basic Statistic Monthly CPI of food in South Africa 2021-2024
• Basic Statistic Monthly CPI of food and non-alcoholic beverages in South Africa 2019-2024
• Basic Statistic Monthly CPI of alcoholic beverages & tobacco in South Africa 2020-2023
• Basic Statistic Monthly CPI of clothing & footwear in South Africa 2022-2023

Inflation rate in South Africa 2028

South Africa: Inflation rate from 1987 to 2028 (compared to the previous year)

Monthly CPI of food in South Africa 2021-2024

Consumer price index (CPI) of food products in South Africa from March 2021 to February 2024

Monthly CPI of food and non-alcoholic beverages in South Africa 2019-2024

Consumer price index (CPI) of food and non-alcoholic beverages in South Africa from March 2019 to February 2024

Monthly CPI of alcoholic beverages & tobacco in South Africa 2020-2023

Consumer price index (CPI) of alcoholic beverages and tobacco in South Africa from January 2020 to September 2023

Monthly CPI of clothing & footwear in South Africa 2022-2023

Consumer price index (CPI) of clothing and footwear in South Africa from January 2022 to September 2023

Employment and wages

• Premium Statistic Labor force participation rate in South Africa 2022
• Basic Statistic Unemployment rate in South Africa 2023
• Basic Statistic Youth unemployment rate in South Africa in 2023
• Basic Statistic Number of people employed in South Africa 2022, by industry
• Basic Statistic Unemployment rate in South Africa 2019-2023, by population group
• Basic Statistic Unemployment rate in South Africa 2019-2023, by age group
• Basic Statistic Unemployment rate in South Africa 2016-2023, by gender
• Basic Statistic Average monthly salary in South Africa 2015-2022
• Premium Statistic Basic salary payment in South Africa 2022-2023, by industry

Labor force participation rate in South Africa 2022

South Africa: Labor force participation rate from 2012 to 2022

Unemployment rate in South Africa 2023

South Africa: Unemployment rate from 2004 to 2023

Youth unemployment rate in South Africa in 2023

South Africa: Youth unemployment rate from 2004 to 2023

Number of people employed in South Africa 2022, by industry

Number of people employed in South Africa in Q3 2022, by industry (in 1,000s)

Unemployment rate in South Africa 2019-2023, by population group

Unemployment rate in South Africa from Q1 2019 to Q2 2023, by population group

Unemployment rate in South Africa 2019-2023, by age group

Unemployment rate in South Africa from Q1 2019 to Q2 2023, by age group

Unemployment rate in South Africa 2016-2023, by gender

Unemployment rate in South Africa from Q1 2016 to Q2 2023, by gender

Average monthly salary in South Africa 2015-2022

Average monthly earnings in South Africa from November 2018 to November 2022 (in South African rands)

Basic salary payment in South Africa 2022-2023, by industry

Basic salary payment in South Africa in September 2022 and 2023, by industry (in million South African rand)

Impact COVID-19

• Premium Statistic Business impact of COVID-19 in terms of import and export in South Africa 2020
• Premium Statistic Impact of COVID-19 on business turnover range of various industries South Africa 2020
• Premium Statistic Change in price of business supplies due to COVID-19 in South Africa in 2020
• Premium Statistic Business expectancy to survive without revenue due to COVID-19 in South Africa 2020
• Premium Statistic Coronavirus workforce measures of businesses in South Africa in 2020

Business impact of COVID-19 in terms of import and export in South Africa 2020

Business impact of COVID-19 on import and export of goods and services in South Africa as of April 2020

Impact of COVID-19 on business turnover range of various industries South Africa 2020

Coronavirus impact on business turnover range in different industries in South Africa as of April 2020

Change in price of business supplies due to COVID-19 in South Africa in 2020

Change in the prices of business supplies due to the coronavirus in South Africa as of April 2020

Business expectancy to survive without revenue due to COVID-19 in South Africa 2020

Expected business survivability without any revenue due to the coronavirus in South Africa as of April 2020

Coronavirus workforce measures of businesses in South Africa in 2020

Workforce measures implemented to cope with COVID-19 impact in South Africa as of April 2020

Further indications

• Basic Statistic South Africa's budget balance in relation to GDP 2029
• Premium Statistic National debt of South Africa 2029
• Basic Statistic Ratio of government expenditure to gross domestic product (GDP) in South Africa 2029

South Africa's budget balance in relation to GDP 2029

South Africa: Budget balance between 2019 to 2029 in relation to GDP

South Africa: National debt from 2019 to 2029 (in billion U.S. dollars)

Ratio of government expenditure to gross domestic product (GDP) in South Africa 2029

South Africa: Ratio of government expenditure to gross domestic product (GDP) from 2019 to 2029

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Economic Indicators Essay (532 words)

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Economic IndicatorsFor the individual who watches CNN a great deal, the term Economic Indicators well recognized.

However, for the individual who chooses not to make CNN a primary station, the term Economic Indicators can be extremely confusing. Economist often use very unlike terms when referring to the fluctuating economy. Economic Indicators happens to be one of the many terms that they use. So, what exactly are Economic Indicators, and what purpose do they serve? In addition to the previous stated questions, are they really that important? Economic Indicators serve the purpose of spying on the economy, let me further elaborate.

Economic Indicators are economic statistics. Examples of economic indicators are unemployment rates, GDP, and even the inflation rate. These so called Economic Indicators inform Economist how well, or how bad the economy is doing. By revealing the present state of the economy, the indicators allow economist to predict how well the economy will do in the future.

Economic Indicators are very necessary. The levels of investments are contingent upon what Economic Indicators suggest. For example, if Economic Indicators suggest that the economy is going to do better or worst than the past, individuals may choose to change previous investment plans. As stated previously, economist and investors are dependent upon Economic Indicators. There are three different types of relationships that Economic Indicators have with the economy.

These three relationships of Economic Indicators should not be confused with the three types of Economic Indicators. Beginning with the types of Indicators, they can be classified as leading, lagging, or contemporaneous also called coincident. First, leading indicators are those that change ahead of the economy. This means that the leading indicators change before the economy.

A good example of a leading indicator, which also will be used later on, is stock market returns. The stock market declines before it is evident in the economy and it increases before the economy is affected by it. The next type of an indicator is lagged. A lagged indicator changes after the economy does. It is referred to as lagged because it changes quarters after the economy. For example, the unemployment rate, one would consider to be a lagged indicator.

Unemployment does not improve immediately after the economy improves. It will take two or three quarters so that unemployment reflects the economy. The last type of Economic Indicator is contemporaneous or coincident. A contemporaneous economic indicator is one that moves at the same rate as the economy.

When the economy goes down, it is reflected by the indicator. Gross Domestic Product is considered to be a contemporaneous indicator. As the economy improves, GDP improves and as the economy declines the same is true for GDP. Without going into detail, the three relationships that Economic Indicators can have with the economy are Procyclical, Countercyclical, and Acyclic. If need be, they will be discussed later.

The first leading economic indicator that will be focused on is Monetary Policy. Monetary Policy is purposed to influence the performance of the economy. This will be done by factors such as inflation, economic output, and employment. By affecting the willingness of people and firms to spend money on goods and services is how Monetary Policy works.

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More From Forbes

Consumer confidence takes a hit in april: can they shake it off again.

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Consumers feel inflationary prices rising higher but have yet to show a pullback on spending.

Just as larger indicators, like grocery food prices, show signs of easing, consumers have apparently decided to throw in the towel. Of course, the past four months have been a litany of consumers saying they’re pretty much done with high prices and high interest rates, and yet still spending, so it’s hard to take it seriously, but there are definitely bigger signs of weakness out there now than we saw earlier in the year. Couple that with a few reminders that we’re still in the midst of the giant social experiment that is tech’s impact on humanity, and you have this week’s take on retail and technology news. Let’s dive in.

Retail Economic Indicators

UK non-food prices entered deflationary territory in April, hitting -0.6% and down from 0.2% in March. Food inflation was higher, but also down to 3.4% from 3.7% in March, both according to the BRC-Nielsen index. And Catalina’s Shopping Basket Index reported that annual inflation had decreased in the US in April across 10 major grocery categories, including coffee, frozen vegetables, soft drinks and waters, and even yogurt. However, there were also some increases in inflation and Catalina’s commentary highlighted that consumers aren’t necessarily feeling the impact of slower inflation yet. I guess whether prices are rising fast or more slowly, they’re still rising, and that’s what consumers are feeling.

Which might explain why consumer confidence took a hit in April, according to The Conference Board. Overall confidence fell to 97.0 in April from 103.1 in March, which had already been revised downward. TCB, which has been a bit more negative about the prospects for 2024 in general, felt motivated to point out that while this is a retreat, it’s still movement within a relatively narrow band that has stayed consistent over the last two years. The present situation part of the index is much higher, though it still declined – to 142.9 in April from 146.8 in March. Consumer expectations for the future are much lower, and have been for a while – down to 66.4 in April from 74.0 in March. Consumers seem to feel like the job market is slowing too, with fewer consumers saying that jobs are plentiful and more saying that jobs are hard to get.

I try to keep company-funded research in the “research” section vs. using them as economic indicators, but given the consumer negativity coming to the fore, it made more sense to throw in two more consumer survey results here. Numerator research found that consumers are increasing the number of grocery trips they make in a month, traveling to more places in cheaper zip codes in order to check all the boxes of what they want for less. Between March 2023 to February 2024, consumers visited 20.7 different grocery retailers in a month, up 23% over the same period in 2019-2020. AlixPartners additionally found that consumers are buying fewer items at each stop, reinforcing the theory that they’re bargain hunting across multiple retailers, and also found that store brand purchases are up 15% in the 52 weeks ending March 2023 vs. the previous year.

Linda Lisanti, Editor-in-Chief of Convenience Store News, pulled together commentary from NRF and their own research to point out trouble in consumer spending in the convenience store market as well. I would consider convenience store spending to be more discretionary than grocery, or at least more sensitive to consumer pullbacks. And CSN found that the percent of shopper visits to convenience stores dropped 4 points versus a year ago, and the shoppers who said they visit convenience stores “all the time” fell 10 points. This coincides with consumers citing the need for more affordable prices as a must-have for a positive convenience store experience.

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Finally, in trying to understand why consumers are still spending even though they don’t seem to have a lot of discretionary income available, I’ve covered the “wealth effect” in the past – the idea that high home values and stock market portfolios, even though it’s not cash in pocket, make consumers feel like they can spend money. But the latest news focuses in on who exactly has all those assets – and given that we’re on the cusp of one of the greatest wealth transfers in history, from Boomers to whoever they decide to leave it to – it should not be a surprise that it may well be Boomers who are sustaining consumer spending, even to the point of making it more difficult to bring down inflation.

Inflation and high interest rates keep interest-bearing accounts and stock portfolios high, and Boomers are at a point where they’re realizing you can’t take it with you, which means continuing to eat out and take vacations. The article behind this points out that Boomers are not a monolithic generation and there are plenty who are living on Social Security and not driving all this consumer spend, but at the same time, the Fed says people ages 55 and up now own nearly three quarters of all household wealth, up from 68% in 2010.

Retail Tech & Research Data

Returns continue to be a huge headache for retailers, and Retail Brew pulled together (registration wall) pretty much the only strategies that retailers have for trying to minimize the expense of returns. Retailers can:

• Charge for returns - almost 2/3 of retailers in a recent survey charge for returns, and among those almost half (44.5%) have added it in the last year
• Push consumers to use buy online, return in store (BORIS) - often offered as the "free" alternative to shipping returns back to the warehouse, it also has the benefit of driving an incremental trip to the store, with the opportunity for incremental purchases
• Get more items back into inventory - apparel brands typically can only sell 75-80% of what gets returns, usually due to wear or some sign of damage, so if they can improve this, possibly even by looking at the resale market, they can at least recover some of the cost
• Head off returns in the first place – by leveraging fit technologies (those these have not been highly adopted by consumers still), or at least identifying patterns of behavior for specific items and investing more in addressing high return behavior, either by providing more in-depth information, or as Amazon has been doing, even warning consumers that the item is a “high return” item
• Cut their losses – use predictive behavior to determine if you should tell the customer to keep it vs. return it

And that’s pretty much it. Not much else you can do to rein in returns.

I promised a reminder that we’re in the middle of a giant social experiment when it comes to the impact of technology adoption on humanity. The first of two items that help explore this topic is a study released by WebPurify that found children 8 and younger spend an average of 2.48 hours per week shopping online. This is based on interviews with 1,001 parents of kids 18 or younger.

It was actually the most of any of the 3 age groups – more than 9-12 year olds (2.16 hours per week), and more than 13-18 year olds (2.27 hours). 16% of parents interviewed believe their children are “addicted” to online shopping. Almost 20% say their child has bought an item inappropriate for their age while shopping online. But before you think that’s all bad, 19% of parents said their child intervened to prevent them falling for a scam, and more than 1/3 of parents said their kids’ online shopping has taught them money management skills.

On the one hand, this behavior really isn’t that different than my elementary school days of grabbing the Sears catalog and making a shopping list of everything I would buy if I had unlimited funds (dating myself, I know. On so many levels). It’s just that the buy button is a lot closer to hand for today’s kids. And just like you would hand your kid some money and make them pay at the register in a store in order to build life skills, it’s not that far to say that kids need the same experience online these days. And yet there are still open questions to be answered – social commerce, combining the addictive nature of social media with a buy button, might not be good for developing brains, in the same way that schools are starting to seriously consider banning phones outright. We’ve talked in the past about digital natives – I don’t think that term has fully applied until what we’re seeing now with Gen Alpha.

AI & Retail

The other great social experiment is, of course, GenAI. On the consumer side, we’ve seen the rush to try it, but now the numbers are starting to show that consumers have not sustained their adoption over time. Ben Evans starts by saying he falls into that category, that he really hasn’t found a killer use case for GenAI adoption, and then digs into why with an analogy to the difference between operating systems and applications like spreadsheets.

LLM’s like ChatGPT are really more like operating systems, and it may be what gets built on those models is where the problem solving and unlocking of value really happens. Much like you could get an OS to add and subtract with some programming, why bother when a spreadsheet application can do that and so much more besides, it may be the agents and the GPTs that people build on top of LLM’s are what actually unlock value. My favorite quote – one that I constantly remind myself of: “[LLM’s] are now very good at making things that look right, and for some use-cases this is what you want, but others, ‘looks right’ is different to ‘right’.” I would also recommend the article as a great insight into how a very successful VC thinks about how software solves problems. Just in this article alone, it’s a pretty thorough overview of product/market fit in the software world.

Retail Winners and Losers

In more signals that consumers may, finally, be pulling back, Starbucks reported consumer headwinds and lower than expected earnings and revenue in Q2. Same store sales and traffic fell across all regions, and the company lowered its outlook for the full year. CEO Laxman Narasimhan said that consumer spending headwinds were “sharper and more accelerated than we expected”. They’re retrenching, with new drinks coming, and more sugar free options, but expected revenue growth is now forecasted at low single digits vs. the original forecast of 7-10% growth.

Walmart Health is closing its doors in a surprise move that impacts 51 locations in 5 states and a virtual offering. The company cited an “unsustainable business model”, however with the Change Health ransomware attack still impacting providers with slow or non-existent reimbursements, it’s not clear if this is because the business model isn’t working, or if the resolution of Change Health’s problems look distant enough that Walmart is cutting its losses sooner than later. The company mentioned “the challenging reimbursement environment” and “escalating” operating costs. But just a few months ago it had announced expansion plans. Just a good example of making sure that a company’s performance (or lack thereof) is because of economic conditions, or because of their own choices.

Getir has become another case of “is it because of consumers or because of their own choices”. The company is pretty much retreating to its home market of Turkey. It built significant market cap on the promise of grocery deliveries in 10-15 minutes, and at its peak was operating in 5 countries. It acquired FreshDirect from Ahold Delhaize in December 2023 – which was not that long ago – but even before then it had exited Italy, Portugal and Spain and cut its workforce by 10%. FreshDirect will continue its operations in the US as a subsidiary of Getir. The delivery market is the epitome of the challenge of eCommerce. More business does not necessarily mean more scale, and you need a LOT of infrastructure in place before you can even start to contemplate economies of scale. No amount of VC financing can change that basic math.

On the positive side of retail, Nordstrom announced a digital marketplace. I was skeptical at the headline, but more positive about it by the time I got through the article. You wouldn’t think that Nordstrom would really have enough market to be able to sustain a digital marketplace, but we’re not talking about competing against Amazon or Walmart, we’re talking more about luxury brand discovery in a model where Nordstrom leverages its customer base to provide access to up-and-coming boutique brands seeking discovery. Most importantly it is an “unowned inventory model” for Nordstrom. So think of it more like a Retail Media Network designed for boutique luxury brands, rather than a marketplace.

Also in the digital world, Walmart had previously announced that it was making its commerce APIs available to developers in the metaverse, and now it’s proving the point with the “ Walmart Discovered ” experience on Roblox. Users can buy items for in real life delivery, while also acquiring their digital twin for use in Roblox. The experience is being run as a pilot through May, and is just one option for how to bring its commerce API’s to life, as the company has partnered with Unity to expose them to developers for use across 20 different metaverse platforms.

And Amazon is doing just fine, thank you, but look more to the surge in its AWS business as it catches up on the GenAI frenzy, rather than its owned retail operations. Revenue rose 13% to reach an all time quarterly high in Q1 2024. AWS saw sales rise 17% in the first quarter, and operating profit rose nearly 84%. To keep it in perspective, AWS sales contributes about $25B out of the $143B in the quarter. Advertising revenue, helped along by adding ads to Prime, rose 24%, to $11.82B in the quarter.

Amazon also posted some stats about its shipping speeds , setting new records in Q1 after a record-setting year in 2023. Nearly 60% of Prime member orders arrive the same day or next day across the top 60 largest US metro areas. I, for one, wish that when I select the “7-10am” time slot instead of the 4-7am time slot, they would not come early, as it sets my dogs into a frenzy way too early in the morning, but I guess that also goes to show that there’s a difference between “fast” and “in service level”.

Not to be outdone, Walmart announced that it is expanding its delivery services to midnight with the launch of “ultra late-night delivery”. This follows an expansion in March to a 6am start for morning deliveries. Getir is getting out, but Amazon and Walmart – who both have achieved enormous scale – are turning up the pressure on any other competitors out there.

Finally, only because I trashed it so hard not that long ago, I have to mention Poshmark’s foray into live shopping . The company launched the effort in April 2023 but it is now “beginning to take off”. Several boutique brands like Cleobella, Pact, and Rothy’s have given it a try. What I like about this article is that it does a good job covering what these brands actually got out of the experience, and it wasn’t really about sales. In China, an influencer can move 100,000 units of a t-shirt in an hour. The fact that this is so far away from what we see outside of China is part of the reason why expectations seem to be totally divorced from reality. But maybe we’re expecting the wrong things in order to gain traction in the west.

At Poshmark, the focus has been primarily on charity items, or samples. The brand being featured hosts with a brand representative, but the twist is that Poshmark users can also sell their pieces from the brand at the same time. Their videos pop up in a split screen view. The benefits aren’t necessarily in immediate sales, but in breaking through consumer attention to get on the radar in the future. Pact said searches for their brand increased 95% after they hosted an event. Rothy’s held an event just this April, and said that 2,000 people participated. One benefit they had not anticipated from the event was that of having fans talk about the products and bringing up their own ways of showing off the products. The brand learned a lot. And raised money for a charity while they were at it.

Store Innovations

These innovations are all fun and interesting, but they’re not things that capture or enhance the value of the store. So for store innovation this week, the mention goes to Forever 21 and Happy Returns , who have partnered to enable the return of Shein products to Forever 21 stores.

For Happy Returns, this is the first third party retailer who can accept returns outside of its 9000 “return bar” locations. A few key details: Happy Returns is owned by UPS, and Shein is a one-third owner of Sparc Group, which operates Forever 21 stores in North America. As part of that deal, which was inked in August 2023, Forever 21 began selling Shein products in stores, so the whole “third party” angle isn’t as third party as it looks on the surface. There is some integration with Happy Returns to validate the return, which does not require a box or label. Once the item is accepted, the consumer gets a coupon for use in the Forever 21 store. The items go back to a Shein warehouse via UPS parcel. I think if you were looking for evidence that returns can drive store traffic and incremental sales, this might be it, even if these relationships are a lot more cozy than they look on the surface.

The Bottom Line

In December, I covered comments from Dollar Tree about the impact of the loss of pandemic era SNAP benefits – that it took about six months to really show up in consumer spending impacts. I don’t know why it took six months, and Dollar Tree didn’t really know either, only that they had been seeing the impact snowball over about two quarters.

Coincidence or not, it was about six months ago that student loan repayments resumed – and here we are seeing a big dip in consumer confidence. Whether it’s coincidence or causal, I have no idea. But it’s enough of a coincidence that in this retail world of conflicting indicators, it’s worth taking a closer look. But the question still remains – six months after SNAP benefits vaporized, consumer spending seemed very shaky, even though there were as many indicators of consumer confidence as there was a lack of. But in January and beyond, consumers kept spending. It certainly didn’t fall off a cliff.

Here we are six months after student loan payments returned with a vengeance, and consumer spending seems shaky once again. Will consumers shake it off again? There are enough signs to say that they could. But sheesh, who knows at this point.

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