TIME Economy

U.S. Employers Laid Off the Fewest People in 17 Years in 2014

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Data are the latest indicator that the U.S. labor market is performing well

Job cuts announced by U.S.-based employers last year were 5% fewer than in 2013 and the lowest annual total since 1997, the latest indicator that the U.S. labor market is performing well.

Overall, employers announced job cuts totaling 483,171 in 2014, down from 509,051 cuts announced the prior year, according to a report by global outplacement firm Challenger, Gray & Christmas.

“Layoffs aren’t simply at pre-recession levels; they are at pre-2001-recession levels,” said John A. Challenger, CEO of the firm. “This bodes well for job seekers, who will not only find more employment opportunities in 2015, but will enjoy increased job security once they are in those new positions.”

Challenger’s report pointed out that while the economy and employment has grown in 2014, no job is ever truly secure as the nation still averaged about 40,000 planned job cuts per month. That’s because companies restructure their operations, announce cost-cutting moves or cut jobs when mergers and acquisitions are completed.

Notably, the tech sector, a relatively strong performer in the economy, saw the heaviest downsizing last year. That sector announced 59,528 planned layoffs. Challenger said that was a 69% increase from a year ago. Much of that downsizing was due to plans announced by Hewlett-Packard and Microsoft to each cut thousands of jobs. With both of their traditional businesses heavily tied to the PC world, the companies are pivoting to compete as the tech market moves to mobile devices where other rivals are stronger.

Job cuts in the retail sector declined by 11% in 2014 but the industry still ranked second. The third-ranked health care sector also posted fewer layoffs in 2014, Challenger said. Meanwhile, the largest increases in job cuts occurred among employers in the entertainment industry and electronics, where job cuts in 2014 more than doubled for both.

“We expect downsizing to remain subdued in 2015, as a growing number of employers turn their attention toward job creation,” Challenger said.

The biggest potential threat? Falling oil prices, which could result in higher job cuts in one of 2014’s star performers: the energy sector. Energy related layoffs only totaled 14,262 last year. In a nod to that possible soft spot, Challenger pointed to an announcement earlier this week that U.S. Steel would be laying off 756 employees due to soft demand related to weak oil prices.

“Lower prices mean less money for research, exploration and new drilling operations,” Challenger said. “However, the slowdown in oil-related industries may be more than offset by the extra dollars in consumers’ pockets as they shell out less money for gas and heating oil. The money not spent at the pump can be used for consumer goods, travel, home improvement, and dining out. Furthermore, continued low gas prices could spur an increase in SUV sales. All of these are going to have an immediate and positive impact on the job market and hiring.”

This article originally appeared on Fortune.com

TIME Companies

The Biggest Problem American Business Is Facing in 2015

TIME.com stock photos Money Dollar Bills
Elizabeth Renstrom for TIME

In order to remain competitive on the world stage, America’s top companies need to take the lead in addressing economic inequality

As 2015 progresses, an improving U.S. economy should buoy markets and provide hope for the business sector. However, before we pop the champagne, it is worth remembering that the past year has also been a turbulent one. Economic inequality continues to widen and worker strikes, once rare, are now increasing in frequency.

The reality is that despite gains in profitability and shareholder value, American businesses could experience a serious labor problem in the near future, and the sooner it is addressed it, the better.

Broadly speaking, there are three factors working against the U.S. right now. The first is an aging population, which not only threatens to burden the system with greater costs in terms of social benefits and pensions, but also a shortage of younger people to fill jobs. Exacerbating this is the fact that the working age population in the future, composed of millennials (and their successors) will require better work benefits, including flexible schedules, higher pay, and room for creativity, in order to feel motivated – a phenomenon that will make it more difficult for companies to secure and retain talent.

By contrast, China and India have vast untapped labor pools, and 65% of India’s population is currently 35 or under, ensuring a young and dynamic labor force for decades to come. This has historically benefited the U.S. through cheap labor, but that could change as these economies become stronger and wage levels rise in response. In addition, Chinese and Indian companies have themselves begun to compete aggressively in the global arena with the workforce behind them to support it, which could put their American counterparts at a disadvantage.

The combination of these factors and a growing perception amongst low and middle income workers of economic unfairness could lead to a crisis of worker availability and competitiveness for U.S. companies within the next few decades unless employers can reach a balance between profitability and compensation that will motivate workers. This is particularly important in the arenas of fast food and retail, which require a large labor force but where wage levels are typically low and a source of escalating friction between companies and their employees, but could effect other sectors as well.

Unfortunately, we keep looking towards the government for a solution, which is a mistake. In today’s hyper-partisan environment of Capitol Hill, compromise on a politically charged issue like wages on which Democrats and Republicans fundamentally disagree is nearly impossible. Moreover, the idea of taxing our way to economic equality, advanced by economists like Thomas Piketty and even Microsoft founder Bill Gates, is unrealistic. Even if it was politically feasible, additional taxation would do little to bridge the gap between employers and workers.

That can only be accomplished by a concerted effort to understand and address the needs of workers by companies themselves, and requires the participation of our most influential business leaders.

For too long, the debate over fair wages has remained stuck in the quagmire of ideology (on both sides), but what is really required is the recognition by the CEOs who run our major corporations of the direct link between worker compensation and the future profitability of their businesses. The reason this is so critical is that our biggest companies set wage levels in their sectors and so only through their participation can a true market-driven solution be found to this pressing problem.

Sanjay Sanghoee is a business commentator. He has worked at investment banks Lazard Freres and Dresdner Kleinwort Wasserstein, at hedge fund Ramius Capital, and has an MBA from Columbia Business School. Follow him on Twitter @sanghoee

TIME food and drink

American Consumption of Cookies in Severe Decline

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Consumers are passing on processed baked goods in favor of healthier options

Much of America’s health news over the past decade or so has revolved around the obesity epidemic. We’ve identified many possible culprits such as fast food and a more sedentary lifestyle, but sugar has taken a lot of the brunt of the criticism.

So maybe we shouldn’t be surprised how much cookie consumption has declined over that same period. A study published in the Journal of the Academy of Nutrition and Dietetics looked at products known as “ready-to-eat grain-based desserts” – also known as RTE GBDs – that include pre-packaged baked goods like cookies, cakes, pies, donuts and other pastries. What they found was that, between 2005 and 2012, sales of these products declined by a massive 24%.

Health experts consider this the good news. The bad news, according to EurekaAlert!, is that “there has been little change in the nutritional content of RTE GBDs manufactured or purchased” during that same period. This could mean that companies could sell more of their sweet products if they’d just make them a bit healthier. If this severe decline in cookie consumption bothers you there is still a few more days left in the year to eat a lot of Christmas cookies. Enjoy!

[h/t Grub Street]

This article originally appeared on FWx.

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TIME Economy

Private Sector Adds More Than 2.5 Million Jobs in 2014

At the current pace of job growth the economy could return to full employment by this time next year

The U.S. private sector has added more than 2.5 million jobs last year, and some economists say that if the pace of hiring continues, the nation could return to full employment by this time next year.

The rosy view can be attributed to the latest employment figures reported by payroll processor Automatic Data Processing and analysis provider Moody’s Analytics. Their report shows private-sector payrolls in the U.S. jumped by 241,000 in December, surpassing the 235,000 increase projected by economists. The U.S. private sector has now added more than 200,000 jobs for four consecutive months.

“At the current pace of job growth, the economy will be back to full employment by this time next year,” said Mark Zandi, chief economist of Moody’s Analytics. Full employment is when all, or nearly all, people who are willing and able to work are able to do so.

The gain in December was fueled by small businesses, which added 106,000 jobs last month. ADP defines small businesses as those that employ fewer than 49 people. Medium-sized businesses added 70,000 jobs last month, while large businesses (which employ 500 or more people) added 66,000.

By sector, the professional/business services and the trade/transportation/utilities industries added the most jobs in December, the report showed. Construction, manufacturing and financial activities employers also added to their payrolls.

The labor market had a stellar 2014, with gains in hiring across a range of sectors as U.S. economic growth encouraged many employers to add jobs. 2014 has been the best year for job gains this millennium, as Fortune previously reported.

The ADP report is issued two days before the federal government’s monthly jobs report, which includes the unemployment rate. Economists predict that Friday’s December jobs report will show U.S. hiring swelled by 245,000, while the nation’s unemployment rate is expected to dip to 5.7% from 5.8%.

This article originally appeared on Fortune.com

MONEY Economy

Why Your Paycheck May Not Grow With the Economy

500lb weight on top of money
Kiyoshi Togashi—Alamy

Though the job market is improving, workers might have to wait a while longer to see those big raises they've been waiting for.

You may have heard that the U.S. economy is back. The nation’s gross domestic product grew by 4.6% and 5% in the last two quarters—the strongest increase since 2003; Americans are more confident about the economy than at any time since the recession; and gasoline prices are as low as they’ve been in more than five years, amounting to a huge tax break for consumers and businesses.

No wonder employers felt strong enough to add 321,000 jobs to the economy in November, while the unemployment rate was at a post-recession low of 5.8%.

Still, many workers have not seen a pick-up in pay even as the employment climate has improved. In fact private sector wages declined by 5 cents (or by 0.2%) in December, despite the economy adding 252,000 jobs.

Total compensation, which includes benefits like medical insurance, rose 2.1% from the same period a year ago. That’s actually a slight uptick from the post-recession norm, but well below pre-2008 levels.

Which is weird. As demand for workers improves, and the unemployment rate declines, you’d expect inflation to rise and wages to increase.

One reason why wages have grown so slowly is that for much of the recovery there’s simply been a lack of demand for goods from consumers as many Americans worked to get out from the terrible effects of the housing crisis.

Since my spending is your income, more dollars saved and fewer spent mean less economic activity resulting in a weaker labor market. And since the Federal Reserve already dropped short-term interest rates to practically zero, and Washington lawmakers are reluctant or disinterested in further fiscal stimulus, marginal relief is coming from D.C.

Another explanation might have to do with the nature of compensation.

In a recent report, the Federal Reserve Bank of San Francisco highlighted the notion of “sticky” wages.

The argument goes: Since businesses were unable to reduce wages as much as they wanted when the economy got really bad five years ago (short of firing people), they are now not inclined to raise salaries as the economy lifts off.

If wages are rigid against a terrible economy, they’re stagnant (at least for a while) when the tide turns. “Businesses hold back wage increases and wait for inflation and productivity growth to bring wages closer to their desired levels,” says the report authors’s Mary Daly and Bart Hobijn. “Since it takes some time to fully exhaust the pool of wage cuts, growth remains low even as the economy expands and the unemployment rate declines.”

While there’s a bit of rigidity to all wages, the authors found “industries with the most downwardly rigid wage structures before the recession have seen the slowest growth during the recovery.” This means that businesses that were able to lower pay when revenues dried up have been more likely to increase wages as the good times returned.

So people in the wholesale trade business (truck drivers to sales reps) saw wages increase relative to pre-recession levels, while those in construction have to make due on less income.

What does this mean for workers?

“The rigidity of wages in a number of sectors has shaped the dynamics of unemployment and wage growth and is likely to do so until labor markets have fully returned to normal,” per Daly and Hobijn. And with still elevated levels of the long-term unemployed, high numbers of workers in part-time positions that want full-time ones, and fewer people quitting their jobs than before the recession, we’re still in not normal labor market territory.

Investors, especially older ones with larger holdings in fixed-income, should take note, too. Without higher inflation, and especially wage growth, the Federal Reserve is likely to delay raising rates.

While recent Fed meetings minutes have been interpreted as having a more hawkish tone, rates aren’t likely to rise (or rise quickly) while workers still struggle to make up lost ground.

Updated to reflect on Jan. 9 jobs report.

TIME energy

Saudi Arabia Facing Largest Deficit in Its History

map-flag-saudi-arabia
Getty Images

Oil prices have been dropping since June because of a market glut

The nearly 50 percent plunge in the price of oil during the past six months is expected to leave oil-rich Saudi Arabia with its first budget deficit since 2011 and the largest in its history.

The budget, announced on Dec. 25, will include spending during fiscal 2015 of $229.3 billion, higher than in 2014, despite revenues estimated at only $190.7 billion, lower than in the current fiscal year. That would leave a deficit of $38.6 billion.

Oil prices have been dropping since June because of a market glut, caused in part because of prodigious oil extraction in the United States from shale formations.

As a result of this glut, OPEC was urged to cut production levels at its Nov. 27 meeting in Vienna in an effort to shore up prices, but wealthy members of the cartel, led by Saudi Arabia, decided to keep production at its nearly two-year-old level of 30 million barrels a day.

Saudi Oil Minister Ali al-Naimi has since explained that the OPEC strategy was to reclaim market share. Fracking has made the United States, once the cartel’s largest customer, nearly self-sufficient in oil. But fracking is expensive, and many believe it can’t be profitable if the price of oil falls much below its current level of around $60 per barrel.

Oil is the principal, if not the only, resource in Saudi Arabia, so it’s clear that the price of oil has a strong influence on how the country’s annual budget is drawn up. Different analyses, however, provide different answers to how Riyadh has forecast the commodity’s value. Four of these reports say the Saudi budget is predicated on oil averaging $55 to $63 per barrel in 2015.

One, from the Saudi investment bank Jadwa Investment, said the budget shows that the kingdom expects its oil exports to average $56 per barrel in 2015. Monica Malik, the chief economist at Abu Dhabi Commercial Bank, agrees, putting Saudi oil expectations at $55 per barrel.

The National Commercial Bank, the largest financial institution in Saudi Arabia, said the Finance Ministry expects a price of $61 per barrel. And Emad Mostaque, an oil strategist at Ecstrat, which consults for emerging markets, said the kingdom expected a price of $63 per barrel.

One particularly knowledgeable analyst is John Sfakianakis, the former chief economic adviser to the Saudi Finance Ministry. He told the London-based Arabic-language newspaper Asharq Al-Awsat that the budget is predicated on oil prices that are appreciably higher, averaging about $75 per barrel in 2015 while keeping production steady at 7 million barrels per day.

“What happened is a surprise to some extent, for amid this huge decline in the price of oil, the majority of people believed that the Saudi budget would base its projected revenues on $60 per barrel,” Sfakianakis said.

“When Saudi Arabia bases its projected oil revenues for next year on $75 per barrel, it is sending a strong message to the market that it expects oil prices to rebound next year,” Sfakianakis said.

This post originally appeared on OilPrice.com.

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TIME Economy

The Left’s Opening Gambit for 2016 Is All About Your Paycheck

Elizabeth Warren
Cliff Owen—AP Elizabeth Warren Sen. Elizabeth Warren ponders the nation's problems at a Senate Banking Committee hearing on anti-money laundering on March 7, 2013.

The unifying value for progressives in 2016? Wages, if leaders like Elizabeth Warren and Richard Trumka have anything to say about it

See correction below.

If unemployment and slow growth were the central economic issues of the last presidential election cycle, wage stagnation and inequality are shaping up to be the focal point of 2016. The U.S. is now solidly in recovery, posting 5 % GDP growth in the third quarter of last year. But growth isn’t necessarily the same as shared prosperity. Inflation-adjusted middle class incomes have actually gone down for the last decade, something even the most rabid free market advocates won’t quarrel with statistically. And working class wages have been stagnant for much longer than that. (On balance, men with only high school degrees haven’t gotten a raise since 1968.) In an economy made up of 70 % consumer spending, that’s obviously an economic problem: no spending equals no business investment equals no jobs equals no spending…you get the picture. But inequality is increasingly taking on social and cultural dimensions, evident in everything from the debate over immigration to the killings that have rocked Ferguson and New York.

Put simply, chronically flat wages are no longer just about the lifestyle divide between the 1 % and everyone else. They’ve become an issue of social justice, democracy, and stability.

The question is, who has an answer to the problem? Liberals will be taking a first crack at it this Wednesday (Jan. 7) at the AFL-CIO-sponsored summit on Raising Wages. As Massachusetts senator Elizabeth Warren, who’ll be giving the keynote address, told me in an exclusive interview in advance of the summit, “Things are getting better, yes, but only for some. Families are working harder, but not doing better. And they feel the game is rigged against them–and guess what–it is!”

In her speech, Warren will be talking through numbers from a database compiled by French academic Thomas Piketty (author of the best-selling Capital in the 21st Century) showing that while 90 % of the workers in the US shared 70 % of all new income between the 1930s and 1970s, things started to change in the 1980s, with the 90 % capturing essentially zero percent of all new income since then.

Funny enough, that’s around that time that the laissez faire economic policies advocated by President Reagan, and later, President Clinton’s administration, took off. Former Treasury Secretary Bob Rubin was the one who lobbied Clinton to roll back the Depression-era Glass-Steagall banking regulation that many (like Warren) believe was a key factor in the financial crisis (which, in and of itself, greatly exacerbated inequality, particularly for African American and Latino families). He and other Clinton advisors like Larry Summers also crafted changes in tax policy that allowed for the growth of stock options as the main form of corporate compensation, a trend that Piketty, Nobel laureate and former Clinton advisor Joseph Stiglitz and many other economists believe has been a reason for growing inequality. I asked Warren if she blamed such Rubinesque policies for our current wage stagnation problem. “I’d lay it right at the feet of trickle down economics, yes. We’ve tried that experiment for 35 years and it hasn’t worked.”

Which will be an interesting challenge for Hillary Clinton, the presumed Democratic front-runner for 2016, and those in her orbit to overcome. Neera Tanden, the policy director for Clinton’s 2008 presidential campaign, now head of the left wing think tank Center for American Progress, will also be speaking at the AFL-CIO summit and, next week, CAP will be debuting a brand new report on what can be done about wage stagnation. The report was spearheaded by none other than Larry Summers. When I mention to Tanden that many people might not associate Summers with “inclusive growth,” she insists that the document is “quite progressive” and that “he’s been right there with it.” This echoes what I’ve heard from other economic insiders about Summers shift away from his historic (some might say infamous) work in financial alchemy and toward more populist concerns like worker wages.

If this conversion has in fact taken place it could be described as either Biblical, or, given current public sentiment around Wall Street, opportunistic. CAP’s report will focus on what the US can learn from other developed countries like Australia, Canada, and Sweden, which have managed to keep worker wages relatively high in the face of globalization and technological disruption. It’s worth noting that they also have much more sensibly managed financial systems than the US.

One thing that all the VIP summit participants, including AFL-CIO president Richard Trumka, seem to agree on: the US is the outlier in developed economies in viewing workers as “costs” rather than “assets to be invested,” as Trumka puts it. It’s a philosophy that underscores America’s focus on the rights and profits of investors to the exclusion of everyone and everything else. It’s a mythology that will be under fire in 2016, as workers, business people, and politicians alike are beginning to question the viability of a system that encourages inequality-bolstering share buybacks rather than real economy investment, and a chase for quarterly profits over what’s best for the economy–and society—at large. On that note, Trumka will be announcing some big policy steps to put the wage issue front and center in the 2016 election conversation. “We want to establish raising wages as the key, unifying progressive value,” he says. “We want wages to be what ties all the pieces of economic and social justice together.” Sounds like a rallying cry to me.

Correction: A previous version of this story incorrectly stated the date of Hillary Clinton’s presidential campaign.

MONEY stocks

Why Main Street’s Gain Is Wall Street’s Pain

150106_HO_Lede
Carlo Allegri—Reuters via Corbis Trader Joseph Mastrolia works on the floor of the New York Stock Exchange while wearing 2015 novelty glasses on New Year's Eve, the last trading day of the year, in New York December 31, 2014.

Monday's 331-point drop in the Dow shows that the tables have turned on Wall Street.

Up until now, the bull market seemed to defy the everyday experience of many Americans: As Main Street households struggled through a recovery that repeatedly fell short of expectations, investors on Wall Street rejoiced.

That’s because the economy was growing fast enough to justify higher share prices, but not so fast that inflation was viewed as a real threat.

This year, though, the script seems to be flipped.

As Main Street Americans finally begin to see the economy improving, it’s the stock market that’s falling short, as evidenced by Monday’s 331-point drop in the Dow.

Monday’s dive was driven by two major economic trends that on the surface should be a boon for U.S. consumers. First, oil prices continued their sudden and surprising slide, driving prices at the pump down with them.

Brent Crude Oil Spot Price Chart

Brent Crude Oil Spot Price data by YCharts

At the same time, the U.S. dollar is now at a nine-year high against the struggling euro. That bolsters the purchasing power of Americans traveling abroad and U.S. consumers purchasing imported goods.

^DXY Chart

^DXY data by YCharts

Thanks to both trends, auto sales last year reached their highest level since before the global financial crisis.

Yet none of this is moving the dial on stock prices so far in 2015.

Some analysts think this could be a recurring trend throughout this year. “Expect a good year on Main Street but a more challenging environment for Wall Street,” says James Paulsen, chief investment strategist for Wells Capital Management.

Why?

Before, lukewarm news on the economic front bolstered the hope that the Federal Reserve would keep interest rates near zero for the foreseeable future. Now, some investors worry that the forces causing oil prices to fall and the dollar to rise — the weak global economy abroad — may be too much for the Fed to tackle even if rates stay low throughout this year.

Moreover, falling oil prices and the strengthening dollar may be giving the market false hope about low inflation.

“Some have argued that lower oil prices give the Fed more room to maneuver. This is a mistake,” says David Kelley, chief global strategist for J.P. Morgan Funds.

While it is true that lower energy prices are reducing inflation in the near term, “falling oil prices are also a big boost for consumers,” Kelly said. “Even if gasoline prices were gradually to move up to $2.75 a gallon by the end of this year from $2.39 at the end of last year, consumers would spend roughly $90 billion less on gasoline in 2015 than they did in the 12 months ended in June 2014.”

Not only is this a financial boost, “it is also a psychological positive with sharp increases seen in consumer confidence readings in the last few weeks,” Kelly said. “This should power an increase in consumer demand which should, in turn, boost prices in other areas.”

TIME energy

Top Five Factors Affecting Oil Prices in 2015

The big question is when they will rise, and by how much

As we ring in the New Year, let’s take stock of where we are at with the oil markets. 2014 proved to be a momentous one for the oil markets, having seen prices cut in half in just six months.

The big question is what oil prices will do in 2015. Oil prices are unsustainably low right now – many high-cost oil producers and oil-producing regions are currently operating in the red. That may work in the short-term, but over the medium and long-term, companies will be forced out of the market, precipitating a price rise. The big question is when they will rise, and by how much.

So, what does that mean for oil prices in 2015? It is anybody’s guess, but here are the top five variables that will determine the trajectory of oil prices over the next 12 months, in no particular order.

1. China’s Economy. China is the second largest consumer of oil in the world and surpassed the United States as the largest importer of liquid fuels in late 2013. More importantly for oil prices is how much China’s consumption will increase in the coming years. According to the EIA, China is expected burn through 3 million more barrels per day in 2020 compared to 2012, accounting for about one-quarter of global demand growth over that timeframe. Although there is much uncertainty, China just wrapped up a disappointing fourth quarter, capping off its slowest annual growth in over a quarter century. It is not at all obvious that China will be able to halt its sliding growth rate, but the trajectory of China’s economy will significantly impact oil prices in 2015.

2. American shale. By the end of 2014, the U.S. was producing more than 9 million barrels of oil per day, an 80 percent increase from 2007. That output went a long way to creating a glut of oil, which helped send oil prices to the dumps in 2014. Having collectively shot themselves in the foot, the big question is how affected U.S. drillers will be by sub-$60 WTI. Rig counts continue to fall, spending is being slashed, but output has so far been stable. Whether the industry can maintain output given today’s prices or production begins to fall will have an enormous impact on international supplies, and as a result, prices.

3. Elasticity of Demand. The cure for low prices is low prices. That cliché can be applied to both the supply and demand side of the equation. Will oil selling at fire sale prices spur renewed demand? In some countries where oil is more regulated, low prices may not trickle down to the retail level. Countries like Indonesia are scrapping subsidies, which will be a boon to state coffers but will diminish the benefits to consumers. However, in the U.S., gasoline prices are now below $2.40 per gallon, more than 35 percent down from mid-2014. That has led to an uptick in gasoline consumption. In the waning days of 2014, the U.S. consumed gasoline at the highest daily rate since 2007. Low prices could spark higher demand, which in turn could send oil prices back up.

4. OPEC’s Next Move. OPEC deserves a lot of credit (or blame) for the remarkable downturn in oil prices last year. While many pundits have declared OPEC irrelevant after their decision to leave output unchanged, the mere fact that oil prices crashed after the cartel’s November meeting demonstrates just how influential they are over price swings. For now OPEC – or, more accurately, Saudi Arabia – has stood firm in its insistence not to cut production quotas. Whether that remains true through 2015 is up in the air.

5. Geopolitical flashpoints. In the not too distant past, a small supply disruption would send oil prices skyward. In early 2014, for example, violence in Libya blocked oil exports, contributing to a rise in oil prices. In Iraq, ISIS overran parts of the country and oil prices shot up on fears of supply outages. But since then, geopolitical flashpoints have had much less of an effect on the price of crude. During the last few weeks of 2014, violence flared up again in Libya. But after a brief increase in prices, the markets shrugged off the event. Nevertheless, history has demonstrated time and again that geopolitical crises are some of the most powerful short-term movers of oil prices.

This post originally appeared on OilPrice.com.

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TIME food and drink

Nearly 46 Million Americans Received Starbucks Gift Cards This Holiday

Starbucks coffee
Bloomberg—Getty Images Starbucks coffee

Coffee giant says 1 in 7 Americans received one of its cards

While much of the frenzy around the holidays invokes images of Wal-Mart door busters and Amazon warehouses, Starbucks is proving itself to be one of the kings of the season.

The coffee giant has announced that one out of every seven Americans received one of its gift cards this holiday season. That’s up from one in eight Americans in 2013. Doing a little math (based on the U.S. Census Bureau’s population clock of about 320 million Americans), that implies that nearly 46 million received Starbucks gift cards in 2014 versus about 40 million in the year-earlier period.

It isn’t exactly a surprise that Starbucks would do so well when it comes to generating gift card sales during the key retail shopping season. A National Retail Federation survey recently reported that one in five had planned to pick up coffee shop gift cards this holiday season, one of the most popular choices for gift cards.

A Starbucks spokeswoman told Fortune that nearly 2.5 million Starbucks cards were activated on Christmas Eve alone, implying the coffee company benefits greatly from those looking to scoop up a last-minute gift. And more than $1.1 billion were loaded on the company’s cards in the U.S. and Canada throughout the most recent holiday season. To add some perspective, Starbucks generated $16.4 billion in revenue globally in the most recent fiscal year.

Gift cards are a popular strategy employed by retailers to generate more traffic to their stores, and Starbucks is particularly good at incorporating those dollars into its loyalty program. The value of a gift card can be uploaded and combined with a java lover’s Starbucks card, which offers broader rewards and discounts, as well as promotions (including the recently announced “Starbucks for Life” promotion).

This article originally appeared on Fortune.com

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