The Commerce Department said the increase reflected
the impact of soaring oil prices, which had pushed up the cost of
It also blamed an unexpectedly high volume of imports
from China for the deficit.
The figure is likely to be seized on by Democrat
presidential challenger John Kerry, who has claimed that the yawning
deficit reflects President Bush's failure to enforce trade agreements
with other countries.
High volumes of cheap imports have contributed to
large-scale job losses among US manufacturers in recent years.
A large trade deficit is potentially destabilising as
it tends to weaken the value of the dollar relative to other currencies.
"A deteriorating trade gap is a double negative
for the US economy because not only do falling net exports take away
from GDP growth, but rising oil imports weigh on the US consumer,"
said Ashraf Laidi, currency analyst at MG Financial in New York.
SINGAPORE ECONOMY LOSES GROUND
Singapore's economy shrank over the summer, weighed
down by soaring oil prices, official figures have shown.
Gross domestic product contracted by an annualised
2.3% during the three months to September, according to the latest data.
The decline outstripped the more modest 0.8%
shrinkage forecast by analysts in a Reuters poll.
However, economists said the city state remained on
track to post full-year growth close to 9%.
The economy's poor performance in the July to
September period followed four consecutive quarters of double-digit
growth as Singapore bounced back strongly from the effects of the deadly
Sars virus last year.
"It's probably just a temporary softness,"
said Claudio Piron, Asian currency strategist at JP Morgan Chase.
"GDP is on the softer side, but we have been
growing at a very, very strong pace for some time."
The Monetary Authority of Singapore, the city state's
central bank, said it would maintain its bias in favour of raising
The MAS last raised interest rates in April.
The summer contraction reflected weaker manufacturing
output and the impact of higher energy costs, fuelled by soaring oil
US light sweet crude oil was changing hands at $53.15
a barrel in Asian trade last week.
US oil prices have risen by more than 60% since the
start of the year, lifted by soaring demand from the US and China, and
recurring worries over supply disruptions in producer countries.
US RIVALS CLASH ON DOMESTIC PLANS
President George W Bush and his Democratic challenger
John Kerry have clashed over domestic policy and security in their last
The two men revealed sharp differences over taxes,
jobs and health care but neither was seen as an outright winner.
Both made pointed attacks — Mr Kerry that Mr Bush
had ruined the economy and health care, Mr Bush that Mr Kerry was
dangerously out of the mainstream.
It was their last chance to address a mass audience
before the November poll.
The candidates will now travel to battleground states
for non-stop campaigning in the last three weeks of what polls suggest
will be a very tight race for the White House.
OIL SET TO TOP RUSSIA-CHINA TALKS
Russian President Vladimir Putin has arrived in China
for a three-day state visit set to be dominated by energy and trade
Before setting off, Mr Putin said Russian interests
would come first in deciding where to build a highly contested oil
pipeline from Siberia.
Energy-hungry China and Japan have both been vying
for Russia's oil.
The two Asian rivals have offered huge investments if
their preferred pipeline route is picked by Moscow.
Chinese Prime Minister Wen Jiabao pledged to invest
about $12bn (9.75bn euros) in the Russian energy sector during his
Moscow talks in September.
The Japanese government has also promised at least
$5bn in investment in Russia's underdeveloped Far Eastern region.
TATA TO INVEST $2BN IN BANGLADESH
Indian industrial group Tata has agreed to invest
$2bn (£1.1bn) in Bangladesh, the biggest single investment by a firm in
the south Asian country.
Tata plans to build a power plant, steel mill and
Finance minister Saifur Rahman said that Tata's move
should help attract other foreign firms to Bangladesh.
Tata chairman Ratan Tata said that "we are here
to invest in Bangladesh where we see opportunities for doing
The agreement, or letter of interest, was due to be
signed on 20 September, but was delayed by outbreaks of violence
following a grenade attack at a political rally in Dhaka.
Tata said last month that it still had to finalise
details such as gas prices and locations for the projects.
NORDIC NATIONS 'MOST COMPETITIVE'
Nordic countries are leading the way in global
economic competitiveness, according to a new business survey.
Finland topped the World Economic Forum's (WEF)
rankings as the most competitive economy in the world for the second
The US took second position, followed by Sweden,
Taiwan, Denmark and Norway, while the UK was 11th and Chad bottom of the
list of 104 nations.
The rankings are drawn from a WEF poll of 8,700
business leaders worldwide.
The Swiss-based think tank's Global Competitiveness
Report aims to reflect a broad range of factors affecting the status of
a country's economy, including a stable macroeconomic environment, the
quality of public institutions and the level of technological
UNIONS BACK T&N PENSIONS LIFELINE
Tens of thousands of workers at car parts maker
Turner & Newall (T&N) look set to get their pensions after
unions backed a new deal from its US owner.
Around 40,000 T&N current and retired staff had
been set to lose all or part of their pension after parent company
Federal Mogul filed for bankruptcy.
Unions said they were "cautiously
optimistic" about the offer.
COPPER TAKES ANOTHER HAMMERING
Copper prices have fallen another 2% in value, after
hedge funds joined in the sell-off which has seen the metal wrenched
back from 15-year highs.
After peaking last Monday, copper has lost 13% in
value after speculative fears of falling demand in China and the US
sparked panic selling.
Other metals followed suit and mining stocks such as
BHP Billiton and Anglo American saw their shares fall sharply.
Strong oil prices were also behind the metals
THOUSANDS AT GLOBALISATION EVENT
Thousands of European activists are arriving in
London for a weekend of anti-globalisation events and protests.
The third European Social Forum is taking place at
London's Alexandra Palace with hundreds of organisations discussing
world politics and society.
The gathering is the largest international event for
broadly left-wing organisations that want to challenge the way society
STATOIL AGREES TO PAY BRIBE FINE
Norwegian oil and gas giant Statoil has agreed to pay
a 20m-kroner ($3m; £1.7m) penalty imposed upon it for alleged bribery
The company has however "not admitted or denied
Statoil was hit with the penalty in June after it
paid a consultancy $15.2m to "influence decision-makers in the
Iranian oil and gas industry".
SONY ERICSSON SEES PROFITS TRIPLE
Japanese-Swedish mobile phone maker Sony Ericsson has
seen profits triple in the third-quarter, outperforming key rival Nokia
whose earnings fell.
It reported that pre-tax profit in the three months
through September was 136m euros (£93.4m) from 39m euros a year
Sales were 1.68bn euros as it shipped almost 11
million handsets. The average price of a phone climbed to 157 euros.
GM TO CUT 12,000 JOBS IN EUROPE
US car giant General Motors has said it is to shed
12,000 jobs in Europe as part of a cost-cutting drive.
GM's German operations — which include car firm
Opel — are expected to bear the brunt of the losses.
The job cuts — most of which will take effect next
year — are part of an austerity drive aimed at cutting costs by 500
million euros ($600m; £340m).
YAHOO NETS SHARP SURGE IN PROFITS
Internet portal Yahoo has said surging online
advertising helped the group more than triple profits in the three
months to the end of September.
Profits jumped to $253.3m for the quarter — a rise
of 287% on the $65.3m seen in the same period last year.
TATA CS CELEBRATES PROFITS UPLIFT
Indian software giant Tata Consultancy Services has
unveiled sharply higher profits in its first set of results since its
stock market launch.
The company said second quarter profits before
one-off costs came in at 5.76bn rupees ($125m; £70m), up by 52% on the
same period last year.
YUAN ADJUSTMENT TALK 'GROUNDLESS'
China's authorities have ruled out any upward
revaluation of the yuan in the near future, squashing rumours in Chinese
The rumours were "groundless" and a
misunderstanding" of China's exchange rate policy, the State
Administration of Foreign Exchange (SAFE) said.
The revaluation rumours grew after Chinese officials
told G7 leaders this month that reforms were progressing.
APPLE PROFITS JUMP ON IPOD DEMAND
Apple Computer has reported a 50% jump in
fourth-quarter profits, driven by demand for its iPod music player.
Profits in the three months ending 25 September were
$106m (£59m), from $44m a year ago while sales totalled $2.4bn, the
highest level for nine years.
Apple said it sold more than two million iPods,
compared with 860,000 in the previous quarter.
INFOSYS CASHES IN ON OUTSOURCING
India's Infosys has turned in sharply higher
quarterly profits, helped by new contracts to run other companies'
technical support services.
The company said net profits for the second quarter
came in at 4.5 billion rupees ($97.1m;£54m), a 49% increase on the same
period last year.
US TO FIGHT NAFTA LUMBER RULING
The US is to take the unusual step of challenging a
Nafta ruling that Canadian imports are no threat to the US timber
The US will now file an "extraordinary
challenge" to the decision delivered in August by the North
American Free Trade Agreement panel.
Nafta's original decision — if it is upheld —
could mean an end to punitive duties on Canadian softwoods.
Only two other extraordinary challenges have been
mounted in Nafta's history.
UK'S JOBLESS LEVEL FALLS FURTHER
Unemployment in the UK fell by 51,000 between June
and August to 1.39 million — the lowest since records began 20 years
The jobless rate, based on the government's preferred
ILO measure, fell to 4.7% between June and August from 4.8% in the
previous three months.
OIL DRIVES UP FACTORY GATE PRICES
The cost of goods leaving UK factories has risen at
its sharpest rate in eight years, driven by the surging price of oil and
other supply materials.
According to the Office for National Statistics, UK
producer output prices rose by 0.3% last month, taking the annual rate
This is the highest figure since April 1996 and
indicates that inflationary pressures remain in the UK economy.
As a result, economists say interest rates could rise
once more this year.
Last week the Bank of England held interest rates
steady at 4.75% for the second month in a row.
The vast increase in the price of crude oil — up
45.3% over the past year — has had the most inflationary effect on UK
producer output prices.
This in turn has increased the price of other
sectors, such as steel, leading to a rise in the price of raw materials
in general up 7.4% so far this year, the fastest increase since November
UK INFLATION RATE FALL CONTINUES
A fall in the price of airfares helped to keep
inflation under control in the UK in September, official figures show.
According to the Office for National Statistics, the
consumer price index (CPI) fell by 0.2% in September to 1.1%, the lowest
level since March.
Falling food prices helped cement the decline, which
follows a fall in CPI to 1.3% in August.
The underlying rate of RPI inflation, which adds
council tax and other household bills, fell by 0.3% to 1.9%.
NORWAY AND US SHARE NOBEL PRIZE
Finn Kydland and Edward Prescott have won the 2004
Nobel Prize for economics.
The Norwegian and American duo received the award in
recognition of their work showing how business cycles affect
They demonstrated that the forces which drive
fluctuations in the business cycle are crucial factors to study in
Kydland and Prescott, who both teach at US
universities, will share a 10m kronor ($1.3m, £723,000) cash prize.