Economy

The retail giant, which last opened a domestic location in 2021, said most of the stores would be newly built.Walmart will add 150 stores in the United States over the next five years, a major expansion drive for the retail giant.The company said the move, which it announced in a statement on Wednesday, would involve millions of dollars in investment. Walmart employs roughly 1.6 million people in the United States, and said it hires hundreds of people each time it opens a new store.Walmart had just over 4,600 stores nationwide at the end of October, down from more than 4,700 a year earlier. The company has not opened a new U.S. store since late 2021.Most of the stores that Walmart plans to open will be newly built, while others will be conversions of existing locations to new formats. The first two new stores will open in the spring, in Florida and Georgia, and the company is completing construction plans for 12 other stores this year. It also said it would remodel 650 locations.Walmart announced this week that it was raising salaries and benefits for store managers and offering them stock grants.The company reported sharply higher profit in the first three quarters of 2023, and its share price is hovering near a record high. It has yet to report earnings for its most recent quarter, which included the holiday season.Consumer spending, which powers the U.S. economy, has been resilient even though shoppers have been squeezed by high inflation and rising interest rates. Credit card data from the holiday season showed retail sales increased from a year earlier.“This is a huge vote of confidence in the American consumer,” Craig Johnson, the founder of the retail consultancy Customer Growth Partners, said of Walmart’s announcement.Mr. Johnson said investors might be concerned over how this could affect Walmart’s Sam’s Club stores, which have increasingly moved from a destination for business owners to stock up on supplies to a place where individuals shop for groceries.Walmart’s choice to open new stores and remodel some existing ones reflects the company’s focus on enhancing its in-store and pickup experiences even as e-commerce has gained popularity, said Edward Yruma, an analyst at the investment bank Piper Sandler.“As we settle into the new normal, what we’ve come to is that the consumer likes great, physical retail locations,” he said.Jordyn Holman More

This article is an onsite version of our Disrupted Times newsletter. Sign up here to get the newsletter sent straight to your inbox three times a weekToday’s top storiesFor up-to-the-minute news updates, visit our live blogGood evening.Falling inflation in the eurozone’s two biggest economies has prompted investors to up their bets on early interest rate cuts from the European Central Bank and raises hopes that the bloc can escape from what the IMF views as its laggard status on growth.Today’s data showed the rate of price increases in Germany falling faster than expected to 3.1 per cent from 3.8 per cent in December while in France it fell to a near two-year low of 3.4 per cent. Joachim Nagel, president of Germany’s central bank and one of the ECB’s more hawkish policymakers, said he was “convinced that we have tamed the greedy beast [of inflation]”.European bonds rallied on the news, sending yields down and indicating investors think the ECB, which has a target inflation rate of 2 per cent, is now more likely to start cutting rates by April.  Crucial to ECB thinking will be tomorrow’s EU-wide data, which is expected to show inflation falling from December’s 2.9 per cent. Another crucial piece of information in determining when rates should be cut will be on wage growth, a point reiterated yesterday by ECB president Christine Lagarde.Today’s figures follow GDP data yesterday showing the eurozone flatlined in the final three months of last year, held back by shrinking German output and stalled French growth, offsetting a stronger than expected rebound in Spain and Italy and bringing the total for 2023 growth to 0.5 per cent. This leaves the bloc trailing the US, which last week was confirmed as the world’s fastest-growing advanced economy in 2023 with growth of 2.5 per cent. China has estimated its economy grew 5.2 per cent. “Europe is still recovering from a lingering energy shock and has not experienced the same degree of fiscal stimulus as the more resilient US economy in recent years,” was how one analyst described it.As for the year ahead, the IMF is pessimistic, cutting its forecast for eurozone growth from 1.2 per cent to 0.9 per cent yesterday in its twice-yearly World Economic Update.The new data comes as Brussels shifts its spending focus from the green transition to defence as it faces a backlash over climate regulation and grapples with Russia’s war in Ukraine. That shift is being complicated by Hungarian prime minister Viktor Orbán, who in his role as the “EU’s chief antagonist”, as the FT editorial board describes him, has been blocking a package of aid for Kyiv.Brussels is hoping that a last-minute offer, revealed this morning by the FT, will resolve the impasse ahead of tomorrow’s EU leaders’ summit.Need to know: UK and Europe economyThe IMF warned UK Chancellor Jeremy Hunt against tax cuts in his forthcoming Budget and urged him to focus on cutting borrowing and boosting spending in areas such as health, education and tackling climate change. The government has set up a new business council as it seeks to win back corporate confidence.Hunt’s wannabe successor, Labour’s Rachel Reeves, said her party would “unashamedly champion” the City if it came to power and now had no plan to reinstate the cap on bankers’ bonuses.A referendum in Paris on raising parking fees for SUVs could inspire cities across Europe to follow suit if passed. The fuel-hungry cars emit more air pollution and carbon emissions than regular vehicles, take up more road space and pose a higher risk to pedestrians and cyclists in crashes.The Russian economy has been boosted by its war in Ukraine. The IMF doubled its previous forecast for 2024 growth to 2.6 per cent, prompting questions over the effectiveness of sanctions against Moscow. The EU has agreed to set aside profits from frozen Russian assets, potentially handing over billions of euros to Ukraine.Need to know: global economyThe IMF upgraded its forecast for global growth this year by 0.2 percentage points to 3.1 per cent, followed by 3.2 per cent in 2025. It also predicted global inflation would fall to 5.8 per cent in 2024 and 4.4 per cent in 2025.You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.Chinese manufacturing activity shrank in January for the fourth month in a row, highlighting the sluggish momentum in the world’s second-largest economy, despite policymakers’ efforts to boost confidence. New data showed the Hong Kong economy grew less than expected last year. Meanwhile Chinese investors are piling into gold as property and stock markets fall and the country’s major airlines forecast a fourth consecutive year of losses.On a more positive note for China’s economy, rapid growth is continuing in electric cars, batteries, and wind/solar power. As our Big Read explains, the west is fretting over the forthcoming wave of low-cost imports.The latest Houthi attack in the Gulf of Aden has pushed up fuel tanker rates and diesel prices, with further rises expected. Companies trading commodities such as iron ore and grain are putting pressure on shipowners to use the Suez Canal route, which is more dangerous, but also cheaper and faster. However, FT commentator Chris Giles says it’s no time to panic.Saudi Arabia, the world’s biggest oil exporter, ditched its plan to raise production in a major policy reversal.Indonesia is flooding the global nickel market with low-cost supplies, forcing rivals to shut unprofitable mines and creating concerns in western capitals that the upheaval will give China more control over the strategic resource. Indonesia is the world’s largest producer with a 55 per cent market share.A new FT visual investigation highlights the hidden cost of supermarket salmon and how fish sold by big retailers in Europe is harming food security in west Africa.Need to know: businessBig Tech investors were downbeat after Microsoft and Google warned of more large costs ahead in the race to develop cutting-edge artificial intelligence products, despite strong quarterly results. Google owner Alphabet missed its advertising forecasts, sending its shares downwards.Novo Nordisk shares hit a record high as sales and profits surged from the Danish pharma’s weight-loss drugs, cementing its position as Europe’s most valuable company.Corporate insolvencies in England and Wales hit their highest level since 1993 last year, highlighting the challenges facing companies amid slowing demand and high production costs. However, charges brought against company directors fell by nearly half, despite a surge in fraud during the pandemic, thought to be because of resource constraints.It’s a depressing week to be working in UK broadcasting. Sky is cutting 1,000 jobs as it shifts from satellite dish services towards digital streaming. It follows Channel 4’s announcement of 200 job cuts, with staff reductions also soon likely at the BBC and ITV.Wuhan in China is emerging as a key testing centre for self-driving cars. The city’s 500 robotaxis, mostly run by Baidu, China’s rival to Google, recorded more than 730,000 ride-hailing trips last year compared with a combined 700,000 in Phoenix, San Francisco and Los Angeles. You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.The World of WorkOur careers expert Jonathan Black proffers some tips on how to prepare for the unpredictable changes coming to the jobs market. After more than 50 years of evidence highlighting its disruptive powers, Pilita Clark asks why we’re still no closer to solving the problems of jet lag.The latest in our Economists Exchange series features Stanford professor Erik Brynjolfsson on what generative AI will mean for productivity, jobs and the society of the future.The Working It podcast discusses how managers can support workers who are struggling with grief.Some good newsHoliday travel can be daunting for visually impaired and neurodiverse visitors. Here are some examples of how tour companies are adapting. Thanks for reading Disrupted Times. If this newsletter has been forwarded to you, please sign up here to receive future issues. And please share your feedback with us at [email protected]. Thank you More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Many times I have heard policymakers pause, lower their voices, furrow their brows and say: “Now is not the time to be complacent.” These are always well-intentioned words of caution. But for them to have any meaning, officials should also identify moments when risks are lower than usual and a little complacency would lighten the mood. Now might be that time. Houthi rebels have threatened ships they link to supporters of Israel, prompting a sharp drop in container shipping using the Red Sea since early December. Shipping lines prefer the longer route around Africa to the risks of sailing close to Yemen’s coastline — with the latest attack coming last week on a commodities vessel registered to a UK company. This adds significant costs in time and fuel. According to Drewry, the supply chain advisers, the price of shipping a standard size container from Shanghai to Rotterdam has more than trebled from $1,442 in mid-December to $4,984 in late January. This will have an effect on inflation. But it is important to put things into context. This is nothing like the supply chain nightmares of 2021 and 2022 that fuelled the worst inflationary episode in the past 40 years. Some Chinese shipping lines are still happily using the Red Sea route.In 2021 the equivalent container shipping price exceeded $14,000 and that had little to do with the six days the Ever Given was stuck in the Suez Canal after running aground. Rampant goods demand as economies opened up after a wave of Covid-19 and consumers avoiding face-to-face services was the main culprit. It was not just the shipping price — approximately 1.5 per cent of the final price of consumption goods according to Goldman Sachs — but the products themselves that jumped in price. You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser.Joseph Briggs and Giovanni Pierdomenico at Goldman Sachs estimate the rise in transportation costs caused by the Houthi attacks will raise global inflation at the end of 2024 by 0.1 percentage points, with a slightly higher increase of just over 0.2 percentage points in Europe. This is, frankly, little more than a rounding error in inflation measurement. Recent UK, European and US measures of price increases have undershot forecasts by more than that. The other key driver of European inflation was the 2022 supply shock in natural gas as Russia exploited its position after the full-scale invasion of Ukraine. With supply dwindling through the European summer, wholesale gas prices rose from around €28 a megawatt hour in June 2021 to a peak of more than €330 per MWh in August 2022. The spot price is now down below €30 again, with shipments of future natural gas for Europe on offer next winter at €34.6 a MWh. These rates are far below the levels used in the European Central Bank’s inflation projections as recently as December last year. Two reasons explain the quiescent future European gas price. First, a continued fall in gas demand across the continent and second a massive increase in supply, particularly from the US. The EU imported 45mn metric tonnes of natural gas from the US in 2023, up from 15.8mn in 2021, according to S&P Global, with the trade so profitable that a glut rather than shortage is more likely this decade. President Joe Biden’s decision to pause approval of new US LNG export terminals last week is unlikely to change the picture. Houthi action has therefore caused a small rise in shipping costs compared with the past three years. That comes at a time of subdued global goods demand. There is a coming glut in options for shipping goods, oil and gas. There is, of course, the possibility of a major war in the Middle East shutting passage through the Gulf of Oman, but this has been a risk for the past 50 years. So I can warn about genuine dangers in future: now is a time to be complacent about the economic risks from the [email protected] More

KYIV (Reuters) – European Union countries are due to meet on Thursday to try to agree on extending billions of euros in economic aid to Ukraine, as well as replenishing a military fund to arm Kyiv as it fights Russia’s almost two-year-old full-scale invasion.Here are some facts and figures about the assistance Ukraine hopes to receive.WHAT SUPPORT HAS UKRAINE RECEIVED AND HOW IS IT SPENT?Ukraine relies heavily on economic assistance from the West and has received more than $73.6 billion in budgetary support since Russia’s February 2022 invasion, finance ministry data shows.Ukraine spends nearly all of its domestic revenues on the defence sector and army, while budget sector overheads have been largely covered by Western aid. A single day of fighting costs about $136 million, Finance Minister Serhiy Marchenko has said.This year the government will again need massive injections of financial support to disburse social payments, wages for budget workers, and pensions for millions of Ukrainians.The government expects a budget deficit of about $43 billion in 2024 and plans to cover it with domestic borrowing and financial aid from its Western partners.Finance ministry officials have previously said they expect to receive about $41 billion in international aid in 2024.The government is worried by uncertainty over the financing. Ukraine has yet to receive aid this year from its biggest financial backers, the European Union and the United States.WHAT IS EUROPE’S UKRAINE FACILITY?Last summer, the European Commission announced a 50 billion euro ($54 billion) multi-year support package named the Ukraine Facility that would be delivered through 2027.Kyiv officials have said they hope to receive 18 billion euros of budgetary support from the facility in 2024, financing that would be crucial for covering the budget gap this year.But there is still no agreement on granting the aid among the bloc’s members, with Hungary voicing persistent opposition. Hungary vetoed the package in December and EU leaders will try again to reach agreement at their summit on Thursday.WHAT ABOUT U.S. ASSISTANCE?Ukraine is in talks with the U.S. government to receive economic assistance this year. Kyiv is seeking $8.5 billion in aid to help cover its budget deficit, senior lawmaker Yaroslav Zheleznyak said.U.S. President Joe Biden’s administration asked Congress in October for nearly $106 billion to fund plans for Ukraine, Israel and U.S. border security, but Republicans who control the House with a slim majority rejected the package.WHAT SUPPORT FROM INTERNATIONAL LENDERS? Ukraine’s cooperation with the International Monetary Fund is important for its macroeconomic and financial stability. In 2023 the IMF approved a new 48-month lending programme worth some $15.6 billion.Ukraine received about $4.5 billion last year. In 2024 the government hopes to receive another $5.4 billion but each tranche is linked to a series of reform targets and economic indicators.Ukraine also expects about $1.5 billion from other international financial institutions, including the World Bank.ANY OTHER AID? Ukraine has agreed on financial support packages from Britain and Japan for 2024. It is also in talks with the governments of Canada, Norway, South Korea and others to secure other funds. More

Companies added 107,000 workers in the first month of 2024, off from the downwardly revised 158,000 in December, ADP reported Wednesday.
Leisure and hospitality reported the biggest increase, with an addition of 28,000 workers, while trade, transportation and utilities added 23,000 and construction rose by 22,000.
The release comes two days ahead of the Labor Department’s nonfarm payrolls report, which is expected to show growth of 185,000.

A 7-Eleven convenience store has a sign in the window reading “Now Hiring” in Cambridge, Massachusetts, U.S., July 8, 2022. 
Brian Snyder | Reuters

Private payroll growth declined sharply in January, a possible sign that the U.S. labor market is heading for a slowdown this year, ADP reported Wednesday.
Companies added 107,000 workers in the first month of 2024, off from the downwardly revised 158,000 in December and below the Dow Jones estimate for 150,000, according to the payrolls processing firm.

Only one sector — information services (-9,000) — reported a decline, but hiring was slow across virtually all sectors.
Leisure and hospitality reported the biggest increase, with an addition of 28,000 workers, while trade, transportation and utilities added 23,000 and construction rose by 22,000. Services-providing companies were responsible for 77,000 jobs, with goods producers adding the rest.
The release comes two days ahead of the Labor Department’s nonfarm payrolls report, which is expected to show growth of 185,000, against the 216,000 increase in December. While the ADP report can provide a barometer for private-sector hiring, the two reports often differ, with ADP often undershooting the Labor Department’s numbers.
On wage gains, ADP reported a 5.2% annual increase, a number that has run above the government’s measure of average hourly earnings.
“Wages adjusted for inflation have improved over the past six months, and the economy looks like it’s headed toward a soft landing in the U.S. and globally,” said ADP chief economist Nela Richardson.
Mid-size establishments, with between 50 and 499 employees, led job creation, adding 61,000. Small business added just 25,000. More

The API unit, which brought in revenue of $1.05 billion in 2022, makes pharmaceutical ingredients that are used in both generic and branded medicines, and serves over 1,000 clients globally.U.S.-listed shares of the Israel-based drugmaker rose 2.3% in premarket trading. Teva is expected to report earnings later on Wednesday. Teva has been focused on cutting its $35 billion of debt as it fought a spate of lawsuits alleging it helped fuel the U.S. opioid epidemic, and is recovering from the loss of exclusivity for its multiple sclerosis drug Copaxone.The company has been betting on a trio of branded drugs – Huntington’s disease treatment Austedo, migraine product Ajovy and schizophrenia drug Uzedy – to drive growth. It also has a number of biosimilar therapies in its pipeline. The company expects the API divestiture to be completed in the first half of 2025. More

LONDON (Reuters) – The Bank of England is expected to offer a first hint on Thursday that it is tentatively moving towards cutting interest rates, having raised them to their highest since 2008 over the past couple of years. Governor Andrew Bailey and his colleagues have previously stressed it is too early to talk about lower borrowing costs.But with the European Central Bank and the U.S. Federal Reserve starting to signal a change in their stance, the BoE may be looking for a different tone too without going too far and suggesting that its fight against inflation is done.Inflation has dropped from a 41-year high of 11.1% touched in October 2022 but it remains double the BoE’s 2% target at 4%.Similarly, underlying price pressures and wage growth have lost of some of their heat recently but remain strong.Investors and economists expect it will take another three or four months before the BoE actually cuts borrowing costs.Below are five ways that it might show it is changing its stance. VOTE COUNTThree of the nine members of the BoE’s Monetary Policy Committee voted to raise Bank Rate in December and November, while the other six decided to keep it on hold. Economists polled by Reuters this month expected eight members will vote to hold Bank Rate at 5.25% this week, with only one still backing an increase.Around one in four of the economists predicted that one MPC member – mostly likely Swati Dhingra, who has expressed concern about the risk of keeping rates high for too long – might cast the first vote for a rate cut since September 2021.TIGHTENING BIASThe BoE could send another signal that its stance is changing by dropping the guidance that it has used for a year that warns of possible need to raise rates higher if evidence emerges of more persistent inflationary pressures.GUIDANCE CHANGEA more explicit acknowledgement that the time for rate cuts is approaching could come if there are changes to another key line from recent BoE statements about how the MPC judges that monetary policy is likely to need to be restrictive for “an extended period of time”.INFLATION FORECASTSWhile the BoE is expected to hint at a future turn in policy, it might also send a message to investors that they have gone too far by betting on four quarter-point rate cuts in 2024. An increase in its forecasts for inflation to above the BoE’s 2% target in two and three years’ time – which are based on market pricing for the future course of interest rates – would suggest Bailey and his colleagues want to rein in those investors’ bets.BAILEY’S PRESS CONFERENCEBailey will have the chance to put his own spin on the BoE’s central message when he chairs a news conference. In December, he told reporters: “Don’t get me wrong, I’m very encouraged by the progress we’ve seen. But it’s too early to start speculating that we’ll be cutting soon.” More

In the interim budget ahead of general elections by May, Modi’s government is expected to focus on infrastructure spending to improve the economy’s long-term prospects, officials said.The economy is projected to grow 7.3% in the fiscal year ending March, the highest rate among major global economies. However, growth in farm output, which contributes about 15% of GDP and employs more than 40% of the workforce, was seen slowing to 1.8% in the current fiscal year, from 4% a year ago.ECONOMIC OUTPUTThe Indian economy is projected to grow around 7% in the next financial year that starts from April 1, and there is “considerable scope” for India to grow above 7% by 2030, according to government estimates.INFLATIONAfter low retail inflation during the first term of Modi till mid-2019, the economy has seen rises in retail prices, driven by post-pandemic global supply disruptions, higher import tariffs and an increase in global commodity prices. Retail inflation in 2022/23 accelerated to 6.7% from 5.5% in 2021/22, and 6.2% the year ago. The cost of living for the poor has sharply risen in last five years due to a surge in food prices. FISCAL DEFICITModi’s administration has justified higher government borrowing to fund a widening fiscal deficit – the gap between income and spending – to combat the impact of the COVID-19 pandemic and to boost infrastructure spending. The fiscal deficit could remain at 5.9% of GDP in 2023/24 after ballooning to 9.3% in 2020-21, during the pandemic. The federal fiscal deficit in 2013/14 was 4.6% of GDP when Modi took charge. UNEMPLOYMENTModi faces criticism for not creating enough jobs despite offering billions of dollars in subsidies to boost manufacturing. The unemployment rate rose to 5.4% in 2022/23, from 4.9% in 2013/14, according to government estimates. Nearly 16% of urban youth in the age group of 15-29 years remained unemployed in 2022/23, due to poor skills and lack of quality jobs, government data showed. Estimates by private agencies are much higher.RISING DEBTIndia’s public debt remains elevated and is expected to rise to 82.3% of GDP by 2024/25, according to IMF estimates.Government payouts for servicing its debt are estimated to increase to over 40% of total revenue receipts in the current fiscal year. General government debt, which includes federal and state government debt, could be 100% of GDP under adverse circumstances by fiscal 2028, the IMF said. PRIVATISATIONThe government met its privatisation target only twice in the last decade, with the notable sale of Air India while it deferred stake sales in state-run banks and companies.In 2023/24, the government may not be able raise even 300 billion rupees through stake sales, less than 40% of budget target. HOUSING BOOM Modi’s government has subsidised construction of concrete houses for around 40 million impoverished households in a decade, and raised spending to build rural roads.The federal and state governments have spent $29 billion over the last five years on housing subsidies. Opposition parties, however, say the programme missed its original deadline of 2022.DOUBLING FARMERS’ INCOME Modi’s critics said his government has not fulfilled the poll promise of doubling farmers’ income by 2022. However, the government says steps like cash payouts to farmers, and raising crop procurement prices, among others, has helped in augmenting farmers’ income. More