Shoppers look elsewhere for inspiration

NEW YORK, March 25, (AP): Erica Dao used to shop at malls once a month, looking in stores and seeing what the mannequins displayed. Now, she mainly looks for inspiration on social media.

“I discover brands through Instagram,” said Dao, 33, of St Paul, Minnesota.

Elizabeth Troy says she was the “queen of sales,” going through discounted items at J. Crew and Banana Republic stores at malls near where she lives in Richmond, Virginia. But her go-to source has become the online subscription service Stitch Fix, which lets her try on clothes at home and decide what to keep.

“I almost never go out to buy now,” says Troy, 50.

Those kind of shifts illustrate the way people are changing how they buy clothing. Shoppers aren’t just showrooming at stores and then buying the same items online if they can find better prices — it’s a more significant separation from the mall.

That is spelling big problems for mall chains like The Limited, which has shut all 250 of its stores, and Wet Seal, which filed for bankruptcy. Department stores like Macy’s and JC Penney — anchors for the malls — are also closing stores. Sears Holdings Corp has said there’s “substantial doubt” about its future, but believes its plan to turn around its business should reduce that risk. The number of “distressed” retailers — those with cash problems and poor credit profiles

The Commerce Department said on Friday that non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, dipped 0.1 percent last month after rising 0.1 percent in January. That suggested a slowdown in business spending in the second quarter.

Shipments of these so-called core capital goods jumped 1.0 percent after declining 0.3 percent in January. Core capital goods shipments are used to calculate equipment spending in the government’s gross domestic product measurement. Last month’s jump reflected increases in orders at the end of 2016.

Economists polled by Reuters had forecast core capital goods orders rising 0.6 percent last month.

Orders for machinery inched up 0.1 percent while shipments increased 0.9 percent. Orders for electrical equipment, appliances and components advanced 2.2 percent, the biggest increase in seven months, and shipments rose 1.5 percent.

A recovery in oil prices from multiyear lows is driving demand for equipment in the energy sector, helping to lift the manufacturing sector.

Manufacturing, which accounts for about 12 percent of the US economy is also being underpinned by a burst of confidence amid promises by the Trump administration to slash taxes for businesses, boost infrastructure spending and repeal some regulations.

Details of the fiscal stimulus package, however, remain vague, resulting in a moderation in orders for equipment in the last couple of months. Economists say business spending could slow in the second quarter even as they expect an acceleration this quarter.

A separate report on Friday from data firm Markit showed its US manufacturing sector index fell in March to a five-month low.

“Business optimism has been at cycle highs since the start of the year, but has yet to translate into commensurate strength in real activity,” said Sarah House, an economist at Wells Fargo Economics in Charlotte, North Carolina.

Spending on equipment is expected to pick up after a 1.9 percent annualized growth pace in the fourth quarter. Still, that will likely be insufficient to offset the drag on GDP from slower consumer spending and a wider trade deficit.

The Atlanta Fed is forecasting the economy growing at a 1.0 percent rate in the first quarter after expanding at a 1.9 percent pace in the final three months of 2016.

Last month, a 4.3 percent jump in demand for transportation equipment offset the dip in core capital goods bookings, and hoisted overall orders for durable goods, items ranging from toasters to aircraft that are meant to last three years or more, 1.7 percent. Durable goods orders rose 2.3 percent in January.

Civilian aircraft orders soared 47.6 percent in February, driven by an increase in plane orders at Boeing.

Orders for motor vehicles and parts fell 0.8 percent in February, while orders for defense aircraft declined 12.8 percent. There were increases in orders for primary metals, but orders for fabricated metal products fell as did those for computers and electronic products.

Unfilled orders for core capital goods increased 0.2 percent last month after rising 0.5 percent in January. Inventories of overall durable goods rose 0.2 percent last month.

In this Feb 8, 2017, photo, washers and dryers appear on display for sale at a J. C. Penney store in Pittsburgh. On

March 24, the Commerce Department releases its February report on durable goods. (AP)

that are facing strong competition — is at the highest rate since 2009, says Moody’s Investor Service.

“Retail is increasingly becoming boring,” said James Reinhart, CEO of the used-clothing marketplace thredUP. He says much of the merchandise at stores is homogenous, while online “each day there’s a whole new assortment.”

Department stores make regular announcements about the next way they’re going to win customers back, like offering more athletic-inspired clothes or adding tech areas. But they’re fighting a market in which people are already buying fewer clothes, spending online or at discounters when they do, and demanding more personal and convenient ways to buy.

out from the country’s storage tanks.

Sources have told Reuters that production could fluctuate slightly from month to month, but supply to the market will remain stable at around 10 million bpd, in line with commitments to OPEC.

“What we are watching closely is the supply. Saudi Arabia will not supply the market more than 10 million bpd,” a Saudi-based industry source told Reuters.

Pumped production is the basis of the government’s direct communication to OPEC, but the supply figure is usually leaked to journalists and tends to form the basis of the secondary source estimates. (RTRS)