The US labour market showed signs of a steady slowdown in October, with job openings increasing moderately and layoffs declining, according to the latest Job Openings and Labor Turnover Survey (JOLTS) report released by the Bureau of Labor Statistics on Tuesday. Job openings, a key indicator of labour demand, rose by 372,000 to 7.744 million at the end of October. However, the September figures were revised downward to 7.372 million from the initially reported 7.443 million. Economists polled by Reuters had anticipated 7.475 million vacancies. Labour Market Dynamics While job openings increased, hires dropped by 269,000 to 5.313 million, and layoffs fell by 169,000 to 1.633 million. These figures suggest a gradual cooling of the labour market rather than a sharp contraction. Hurricanes and strikes also impacted October’s labour market data. Rebuilding efforts in storm-affected regions and the resolution of strikes at Boeing and another aerospace company are expected to contribute to a ...
McDonald's reported a surprising drop in global sales on Monday, marking its first decline in 13 quarters. The decline is attributed to consumers seeking lower-priced menu options and avoiding higher-priced items like the Big Mac amid persistent inflation.
Key Takeaways:
Sales Decline: Global comparable sales fell 1% in the second quarter, against expectations of a 0.5% increase. This is McDonald's first global sales drop in more than three years. Overall revenue, however, rose by 1%.
Consumer Behavior: Inflation has led lower-income consumers to opt for more affordable food options at home. This shift has pressured fast-food chains to rely on value meals to attract customers.
US Performance: US comparable sales fell 0.7% for the quarter ended June 30, compared to a 10.3% increase a year ago. The $5 meal deal launched in June performed above expectations and is set to continue into August.
International Markets: Sales in international markets, which constitute nearly half of McDonald's revenue, dropped 1.1%, with notable weakness in France. The business segment where local partners operate restaurants saw a 1.3% decline in sales, driven by a slower recovery in China and impacts from the Middle East conflict.
Strategic Adjustments: McDonald's is committed to protecting profitability by being selective with price increases. The company maintained its 2024 forecast for an operating margin in the mid-to-high 40% range and its capital expenditure budget of up to $2.7 billion, focusing on new restaurants in the US and international markets.
Broader Market Context: The results align with recent comments from Coca-Cola's CEO about softness in away-from-home channels in North America, indicating fewer people dining out. McDonald's and other major brands like Starbucks have also been impacted by consumer boycotts linked to geopolitical conflicts.
Earnings Miss: McDonald's earned $2.97 per share on an adjusted basis in the second quarter, missing expectations of $3.07.
Despite the drop in sales, McDonald's shares rose 4% in early trading as the market reacted to the company's strategic adjustments and efforts to attract cost-conscious consumers.
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