According to the commerce department, consumer spending
grew 1.6% in the year to June, the slimmest increase in three years.
The University of Michigan consumer sentiment index, a
well-regarded measure of economic health, fell to 95.9 in August from 96.7
in July, although economists had expected a more severe decline.
Export growth of 6.1% fell far short of the 14.1%
expansion in imports, exacerbating the pressure on growth.
But core inflation excluding energy and food costs -
the preferred measure of the Federal Reserve, which sets US interest rates
was just 1.7%.
The GDP growth rate was in line with forecasts.
But it comes at a time when Federal Reserve chairman
Alan Greenspan has said the economy is hitting a "soft patch".
The data may make awkward reading ahead of the
Republican Party convention which will formally nominate President George
W Bush for the November presidential poll.
The health of the economy — in particular the
prospects for job creation, with 1.1 million jobs lost since President
Bush took office — is one of the key electoral battlegrounds.
MOBILE PHONE SALES GROW STRONGLY
Global mobile phone sales grew by 35% in the second
quarter of 2004 compared with the same period last year, according to
market monitors Gartner.
All regions saw stronger demand, with total handset
sales reaching 156 million, Gartner said.
Replacement handsets fuelled sales in the United States
and Europe, where the mobile phone market is maturing.
Meanwhile Nokia, the leading handset maker, continued
to lose market share to arch-rivals Motorola and Samsung.
Nokia's market share rose in the second quarter
compared with the first three months of the year, helped by a
But its share of the global market was still down
compared with the second quarter of 2003.
Motorola expanded in the Americas, but lost some market
share in China, Gartner said.
The report also highlighted spectacular growth in
Latin America, notably Brazil and Mexico, led the sales
increase, while demand in Argentina showed signs of recovery following its
economic meltdown in 2001.
In the US, replacement sales were high as new
generation handsets, often subsidised by mobile phone companies, attracted
customers willing to upgrade.
Phones incorporating new features such as cameras are
proving particularly popular.
The evidence supports recent forecasts that the
popularity of mobiles packed with extra features is set to explode as they
get better and cheaper.
YUKOS FACES OIL PRODUCTION HALT
Yukos, the Russian oil giant, could be forced to halt
production because of a new court order, the company has said.
Reports said a court had agreed to a request from
prosecutors that would prevent the company from accessing its bank
Yukos faces a demand for billions of dollars in back
taxes and has said the bill could push it into bankruptcy.
The latest reports have reignited world oil prices,
with New York light crude up 42 cents at $44.42 (£24) per barrel.
London Brent gained 48 cents to $41.95 per barrel.
The new threat of Russian supply disruptions comes hot
on the heels of US inventory figures showing a sharp fall in crude
stockpiles, heightening fears of shortages in the run-up to the peak
winter demand season.
The Moscow court ruling means prosecutors will be able
to lay claim to 76bn roubles ($2.6bn; £1.45bn) in bank accounts belonging
to Yukos, according to Reuters.
RUSSIA SIEGE GOES CONTINUES
Hundreds of people, among them many children, have
spent a second night as hostages of an armed gang in Russia.
Sporadic explosions and gunfire were heard near the
school in Beslan, North Ossetia, during the night.
Thursday (September 2) saw the gang release 26 women
and young children, as negotiations aimed at resolving the crisis without
President Vladimir Putin has said that everything will
be done to save the lives of the hostages.
The authorities say at least 12 people, including one
attacker, have been killed since the building was seized.
Hundreds of relatives of those being held inside the
school are waiting anxiously outside the security cordon.
FALL IN SALES AT US CAR GIANTS
US carmakers General Motors and Ford posted weaker US
sales for August and announced cuts to planned fourth-quarter production.
GM and Ford saw their third straight month of lower
sales, despite continued customer sweeteners.
GM said it was disappointed with its 7 % drop in sales,
and Ford reported a 5.9% drop in results for US brands.
But Chrysler's side of DaimlerChrysler reported a
fifth-straight month of stronger results with a 1% rise. It saw sales of
its 300 sedan and Magnum sports wagon continue to do well.
JAPAN'S PRODUCTION FAILS TO GROW
Japanese industrial production has failed to expand for
a second month in succession, official data has shown.
The nation's industrial output in July remained
unchanged from June, according to the below-expectation figures.
July's 0% month-on-month figure follows June's 1.3%
fall — another sign that Japan's economy could be slowing down.
Analysts had expected a 1% increase for July, and the
release of the data helped see the Nikkei drop 1.18% in Tokyo.
BUSH SETS OUT RE-ELECTION VISION
US President George W Bush has given one of the biggest
speeches of his re-election campaign, at the end of the Republican Party
He defended his record, notably the wars in Afghanistan
and Iraq, and set out his vision for the next four years.
Mr Bush vowed to stay "on the offensive"
against terrorists worldwide, and build a safer America.
The president also launched a forthright attack on his
Democratic opponent, John Kerry.
Opinion polls suggest the two candidates are running
virtually neck-and-neck ahead of the presidential election in November.
CHINA SET FOR SURGE IN CAR SALES
The number of cars on China's roads is set to rise
sevenfold to 140 million by 2020, the government has forecast.
The total number of cars will eventually peak at 250
million, or 150 cars for every 1,000 people, the Communication Ministry
That compares with about 500 cars per 1,000 people in
Western Europe, and close to 900 in the US.
The projected surge in car sales reflects rapidly
rising income levels fuelled by China's economic boom.
INTEL GLOOM WEIGHS ON CHIP STOCKS
Computer chip maker Intel has unveiled a weaker than
expected sales outlook, forcing microchip stocks sharply lower.
Intel said third quarter sales would fall within a
range of between $8.3bn and $8.6bn, down from its previous estimate of
EBAY TIGHTENS GRIP ON ASIA MARKET
The world's largest internet auctioneer Ebay has raised
its stake in South Korean affiliate Internet Auction.
Ebay said it paid $325m (£180.3m) to increase its
holding to 86% from 62%. It plans to buy the remaining shares.
South Korea has the highest broadband penetration rate
in the world — with 11 million users out of a total population of 48
Internet Auction has 9.9 million subscribers — more
than a fifth of the country's population.
EUROZONE RATES UNCHANGED AT 2%
The European Central Bank (ECB) has left eurozone
interest rates on hold at 2%, and has upgraded its economic growth
ECB President Jean-Claude Trichet said the bank
expected the eurozone to grow by 1.6%-2.2% this year, up from its previous
forecast of 1.4%-2%.
For 2005, the ECB forecast a growth rate of 1.8%-2.8%,
compared with the previous 1.7%-2.7% estimate.
The growth upgrade comes despite a recent 30% surge in
RATES AND WEATHER DETER SHOPPERS
Higher interest rates and the cool summer weather have
taken their toll on UK retail sales in August, according to the latest CBI
Sales were up for 34% of firms, but 32% reported
falling sales, resulting in a sales balance of plus 2%, much lower that
the plus 24% reported in July.
UK 'FAILING DISABLED JOBSEEKERS'
The UK government is not doing enough to publicise help
for disabled people who want to work, a Royal National Institute of the
Blind survey found.
It found that 70% of employers have never heard of a
£50m financial support scheme for equipment, ramps and other aids, known
as Access to Work (ATW).
The RNIB says there is huge potential for disabled
people to find jobs, as job centres have 600,000 vacancies. The Department
of Work and Pensions has defended its efforts.
MICROSOFT LAUNCHES ITUNES RIVAL
Microsoft has launched a music-downloading service to
rival Apple's iTunes and other providers.
The software giant has released a preview version of
its new MSN Music service, which allows users to legally download songs
for 99 cents (55p).
Whole albums will also be available for $9.99,
Microsoft said. About 500,000 songs will be initially available, with more
added on a weekly basis.
DOLLAR SLIDE HITS DIAGEO REVENUE
Diageo, the world's biggest spirits company, has
reported a dip in full-year sales revenue after a slide in the US dollar
eroded the value of exports.
The maker of Smirnoff vodka said Europe was a
"challenge", while North America provided the "biggest
opportunity". It reiterated profit targets set in July.
Diageo said that currency volatility knocked $105m
(£59m) off earnings in the year ending 30 June. Turnover for the period
was £8.89bn, down from £9.28bn a year earlier.
PARIS TO SELL TELECOM GROUP STAKE
The French Government is to sell part of its stake in
France Telecom to help reduce national debt, the finance ministry has
The government said it was selling a 9.6% in the group,
but may raise the amount to 12.1% depending on demand.
The sale will raise at least 4.58bn euros ($5.5bn;
£3.1bn) based on the firm's closing price last Tuesday.
The news came as France Telecom unveiled plans to raise
up to 1.15bn euros with a convertible bond issue.
France Telecom said the bond issue would help to shore
up the company's finances.
INDIA PLANS TO HELP BOOST EXPORTS
India has unveiled a package of trade incentives, aimed
at helping the country grow its exports by 20% a year for the next five
years. The package should enable it to double its share of global trade by
WTO RULES FOR EU IN US TRADE ROW
The World Trade Organisation (WTO) has given the
European Union (EU) and others the go-ahead to impose sanctions on the US
for its anti-dumping rule.
Under the Byrd Amendment, the US has fined companies
who dumped goods and then given the money to the companies who complained
about the dumping.
The WTO has said that the EU and seven other states,
including Japan, Canada, and India, can take action.
The EU has yet to decide if it will impose sanctions.
After the ruling, the US said it would work with
Congress to modify the Byrd Amendment, but would remain vigilant on unfair
EU Trade Commissioner Pascal Lamy welcomed the WTO
decision but gave little clue as to whether the EU would impose sanctions
of its own.
CHINA TO MODERNISE RAIL ROUTES
China has awarded contracts to three foreign firms with
the aim of modernising its congested rail network, the state-run media has
China's railways have proved unable to keep up with the
needs of its booming economy, causing freight bottlenecks that have
contributed to inflation.
The deals went to Alstom of France, Bombardier of
Canada, and Kawasaki Heavy Industries of Japan.
INDIA GETS $12BN WORLD BANK DEAL
The World Bank is to raise its lending to India under a
newly-drafted 4-year assistance programme, which starts in 2005.
The Bank has agreed to lend India a maximum of $12bn
(£6.6bn) over the four years, or $3bn a year.
It signalled that it is prepared to lend the whole
$12bn this time whereas previously only about two-thirds of the available
$12bn was disbursed.