In the QAD Precision News Round-Up: 24 September 2021

In the QAD Precision News Round-Up: 24 September 2021, US current account deficit increases; US jobless claims increase; exports to Ireland from the UK down; FedEx to increase shipping rates; Target to hire 100,000 workers; 2021 Foreign-Trade Zone Annual Report and more.

Global Trade

US CURRENT ACCOUNT DEFICIT INCREASES IN Q2

In the second quarter of this year, the US current account deficit widened to a 14-year high as businesses raised imports to replenish stock amid strong consumer spending. The current account deficit, which measures the flow of goods, services and investments into and out of the US, increased by 0.5 percent to $190.3 billion in Q2 according to the Commerce Department. Last quarter, the current account gap represented 3.3 percent of gross domestic product and was down from 3.4 percent in Q1. The US economy grew at a 6.6 percent annualized rate in Q2, driven by double-digit growth in consumer spending. For more details, please see Reuters.

US JOBLESS CLAIMS INCREASE

Americans filing jobless claims increased, despite the labor market on an uptick. The Labor Department reported a seasonally adjusted 351,000 unemployment claims for the week ending September 18. This represents a 16,000 increase for that week. Additionally, there was a 24,221 increase in unadjusted claims in California. In August, job growth slowed with payrolls reporting the smallest gain in seven months. At the end of July, the jobless rate was 5.2 percent. The slump is partially from a worker shortage and a hiring stall in the hospitality industry, both related to covid and the delta variant. For more details, please click here.

EXPORTS TO IRELAND FROM UK DOWN 

According to official Irish government data, exports from the UK to Ireland declined by approximately £2.5 billion in the first seven months of 2021 due to Brexit-related factors. The Central Statistics Office (CSO) said the value of goods imported to Ireland from the UK declined 32 percent year-on-year to €6.3 billion over the period. In July, imports dropped 32 percent compared with the same month in 2020, with the largest decline in food and live animals. Since January, when Brexit came into effect, these goods have been subject to physical and documentary controls on entry to Ireland. In recent weeks, the UK government delayed checks on goods travelling from Ireland to the UK. For more details, please see The Guardian.  

Carriers 

FEDEX TO INCREASE SHIPPING RATES 

Beginning January 3, 2022, FedEx Express, FedEx Ground and FedEx Freight will increase shipping rates. For U.S. domestic, US export, and US import services, FedEx Express shipping rates will rise by an average of 5.9 percent. FedEx Ground and FedEx Home Delivery shipping rates will also increase by an average of 5.9 percent. In addition, FedEx Ground Economy shipping rates will increase. For customers who use FXF PZONE and FXF EZONE, FedEx Freight shipping rates will rise by an average of 5.9 percent while customers who use FXF 1000 and 501 will see an average increase of 7.9 percent. For more details, please click here. 

Auto

SEMICONDUCTOR SHORTAGE COST INCREASES 

According to consulting firm AlixPartners, the semiconductor chip shortage will cost the global automotive industry $210 billion in revenue in 2021. The current projection is nearly double the $110 billion the firm projected in May. AlixPartners is projecting in 2021, a loss of 7.7 million units of production. It had previously forecast 3.9 million units in its May report. The auto industry suffered covid breakouts in its factories as well as labor shortages and supply issues this year that are contributing to its revenue losses. For more details please see CNBC.

Retail

TARGET TO HIRE 100,000

Target announced it will hire fewer workers this holiday season, but will offer more hours and flexibility to existing employees. On Thursday, Target announced its plans to hire 100,000 seasonal workers. This is about 30,000 less than last year. In an effort to attract more workers, Target pledged to spend $200 million over the next four years to offer undergraduate and associate degree programs to its employees. Additionally, Target will offer employees more schedule flexibility through its new employee app. In an effort to combat a worker shortage, Target plans to both attract and retain employees past the holiday season. For more details, please see The Washington Post.

QAD Precision News 

HIGHLIGHTS FROM THE 2021 FOREIGN-TRADE ZONE ANNUAL REPORT

No matter the industry, 2020 was a year of transition. Disruptions like the COVID-19 pandemic, on-site worker shortages, and port entry blockages made waves for companies around the globe. Unsurprisingly, this also impacted companies using the US Foreign-Trade Zones program. These unprecedented times made for a highly anticipated Annual Report from the US FTZ board. We’ve collected the most important data from this year’s report, so you don’t miss out on leading industry trends. Read the full report here.