The Conference Board's index of US consumer
confidence dropped to 90.5 in November from 92.9 in October.
Analyst Gina Martin from Wachovia, said further
declines in confidence could lead to slower spending by consumers in
"The present situation looks pretty sunny, but
there are clouds on the horizon," she said.
Capital Economics, however, said they were not
reading too much into the dip.
"We would argue this has more to do with a long
overdue correction from the over-optimism that has crept into the index
this year," said Paul Ashworth, Capital's international economist.
Fresh released gross domestic product data was better
than economists had predicted.
The Commerce Department last month estimated the
third quarter growth rate would be 3.7%.
Business investment in new equipment and software
helped boost the figures.
And exports — buoyed by weakness in the dollar —
rose 6.3% over the period, the Commerce Department added.
US IMPORTERS BACK CHINA TEXTILES
Textile importers and retailers have sued the US
Government to block a proposed limit on imports from China.
Producers have asked for textile quotas because they
say Chinese imports will damage the domestic industry.
The Commerce Department and four other government
agencies are investigating the allegations.
But the US Association of Importers of Textiles and
Apparel (USA-ITA) says the case is based on inaccurate information and
violates importers' rights.
According to Laura Jones, USA-ITA's executive
director, the rules for the government agencies — which together make
up the Committee for the Implementation of Textile Agreements (CITA) ban
petitions such as those from the textile industry.
CITA had changed the rules based "on some future
threat", she said.
"The government is accepting petitions that
don't even meet its own limited standards. The government's behaviour is
US textile manufacturers made the petitions based on
a safeguard arrangement agreed with China during its entry negotiations
with the World Trade Organisation (WTO) in 2001.
The agreement gives WTO members the right to impose
temporary quotas if Chinese imports are found to cause market
But China has said that any import quotas placed on
its textiles would have an impact on bilateral trade ties and warned
that it might take the dispute WTO. The USA-ITA lawsuit could boost
China's position in the argument.
RICH WILL PAY TAXES, SAYS AHERN
The Irish government is to end a tax shelter system
that has benefited some of the richest people in Ireland.
Prime Minister Bertie Ahern said "the game is
up" for people including 11 who earned more than 1 million euros a
year but paid no income tax at all.
"The budget of next year is going to deal with
them," he told RTE radio recently.
Those exempt from income tax include artists,
musicians and stallion owners while film-makers and multi-storey carpark
owners also receive tax breaks.
Ahern's comments came a day after Finance Minister
Brian Cowen unveiled a budget for 2005 that lifted spending and welfare
payments without increasing taxes.
Mr Cowen said the tax breaks cost the state 8bn euros
($10.6bn; £5.5bn) a year in lost revenue and he would review them
within a year.
DOLLAR FALLS TO FRESH RECORD LOWS
The dollar fell to yet another record low against the
euro on Dec 1 — and slipped to its weakest rate against sterling since
The US currency hit a low of $1.3360 against the euro
in late afternoon trade in New York.
The pound meanwhile, boosted by positive UK
manufacturing data, reached as high as $1.9262, as the downward pressure
on the dollar continued.
The greenback has lost up to 10% of its value in
Factors have included concern at the giant US current
account deficit, and poor US consumer confidence data.
The European Central Bank has also not helped, with
its president Jean-Claude Trichet saying that the bank was unlikely to
intervene in favour of the dollar.
INDUSTRIAL OUTPUT FALLS IN JAPAN
Japanese industrial output fell in October while
unemployment rose, casting further doubt on the strength of the
country's economic recovery.
Production dropped 1.6% in October, reflecting a
decline in exports, while unemployment levels edged up 0.1% to 4.7%,
slightly higher than forecast.
The economy has grown for six quarters but growth
slowed dramatically in the last quarter amid weaker global demand.
Japan's government remains optimistic due to strong domestic demand.
CHINA IN LANDMARK ASEAN PACT
A landmark trade agreement between 10 South East
Asian countries and China has been signed at a summit in Laos last week.
The deal could eventually unite a quarter of the
world's population in a free trade zone.
Participants at the Association of South East Nations
(Asean) summit have also announced plans to hold another regular East
The new summit, like the trade agreement, would aim
to strengthen economic ties in the region.
The Asean-China trade accord unites China and South
East Asian countries in a single market worth $2 trillion.
BLAIR TO BACK 'OPTIMISTIC' BROWN
Tony Blair will use a speech in Edinburgh to
congratulate Gordon Brown for creating and promoting economic stability.
The Chancellor's pre-Budget report forecast strong
economic growth and high tax receipts.
Opposition parties and independent experts have
raised doubts that the predictions are overly optimistic.
But Mr Blair will say Mr Brown has provided the
cornerstone of Labour's achievements in government.
He will say that economic stability, opportunity and
security are the key themes on which Labour has established the middle
BUSH PICKS NEW US SECURITY CHIEF
Former New York police commissioner Bernard Kerik is
set to be the new US homeland security secretary, US officials have
President George W Bush has chosen him to replace Tom
Ridge, the only person so far to head the department created after the
11 September attacks.
Mr Kerik was head of the NYPD in 2001, when the Twin
Towers were destroyed.
As Mr Bush builds a team for his second term, US
ambassador to the United Nations, John Danforth, has resigned.
The former Republican senator only took on the UN job
in July, after the previous US envoy, John Negroponte, became ambassador
INTEL SUNNY ABOUT HOLIDAY SALES
Strong demand and reduced stockpiles foretell a
dramatic rise in chip giant Intel's sales outlook, the firm says.
The company, whose chips power most of the world's
PCs, said it expected sales of $9.3-9.5bn (£4.8-4.9bn) for the three
months ending 25 December.
The forecast is far above both Intel's previous
prediction of $8.6-9.2bn, and its all-time record of $8.74bn.
CHINA AVIATION SEEKS RESCUE PLAN
Crisis-hit jet fuel supplier China Aviation Oil (CAO)
has launched a rescue plan after running up $550m (£284m) in trading
The Singapore-based firm said it had appointed
consultant Deloitte & Touche to act as its financial adviser.
CAO collapsed on Dec 1 after amassing trading losses
on oil futures in October, when global prices surged.
The financial scandal is the biggest to hit Singapore
since trader Nick Leeson brought down Barings Bank in 1995.
The Singapore-based British trader famously lost
$1.2bn in speculative currency deals, eventually causing the collapse of
the UK bank.
EURO RATES ON HOLD FOR 18TH MONTH
The European Central Bank has kept the cost of
borrowing at 2%, against a background of a soaring currency and
lacklustre eurozone growth.
Dec 2 decision means the 12-nation eurozone base
interest rate has remained unaltered for 18 months.
The announcement came as no surprise to economists,
who had widely predicted an unchanged position.
ECB president Jean-Claude Trichet said the euro rise
was "unwelcome", and that there was no thought of raising
FRENCH PARTY'S 'YES TO EU TREATY'
Officials in France's Socialist party say its members
have voted "yes" in an internal referendum on whether to back
the EU constitution.
Final results of the vote are not expected until Dec
But an aide to the party leader, Francois Hollande,
estimated that 55% of members who voted were in favour of the
France is to hold a referendum on the text in 2005.
Opinion polls show half the French are still undecided.
SOARING OIL 'HITS WORLD ECONOMY'
The soaring cost of oil has hit global economic
growth, although world's major economies should weather the storm of
price rises, according to the OECD.
In its latest bi-annual report, the OECD cut its
growth predictions for the world's main industrialised regions.
US growth would reach 4.4% in 2004, but fall to 3.3%
next year from a previous estimate of 3.7%, the OECD said.
However, the Paris-based economics think tank said it
believed the global economy could still regain momentum.
Forecasts for Japanese growth were also scaled back
to 4.0% from 4.4% this year and 2.1% from 2.8% in 2005.
But the outlook was worst for the 12-member eurozone
bloc, with already sluggish growth forecasts slipping to 1.8% from 2.0%
this year and 1.9% from 2.4% in 2005, the OECD said.
Overall, the report forecast total growth of 3.6% in
2004 for the 30 member countries of the OECD, slipping to 2.9% next year
before recovering to 3.1% in 2006.
SAMSUNG SEES HIGHER MOBILE PROFIT
Korean electronics firm Samsung says it expects
rising profits from mobiles in 2005 despite tough competition.
The three months to September produced profits of
2.69 trillion won ($2.35bn; £1.3bn), down from 3.13 trillion won in the
previous quarter — albeit up 46% from the same period in 2003.
GREECE WARNED ON FALSE EURO DATA
Greece has received a formal warning from the
European Commission for publishing false data about its public finances.
The Commission found that Greece had hugely
underreported its budget deficit between 1997 and 1999.
Greece had admitted that it would not have qualified
to join the euro in 2001 if the true state of its budget deficit had
been known at the time.
Greece could face legal proceedings if it does not
change its procedures.
The warning follows an investigation into Greece's
public finances by Eurostat, the Commission's statistical agency.
The body found that Greece's deficit in 1997 was
actually 6.6% of its GDP, not 4% as was reported at the time.
Eurostat has also revised upwards Greece's deficit
figures for 1998 and 1999.
In both years, Greece's deficit was above the 3% cap
which the EU imposes on states wanting to join the euro.
NOKIA TO MAKE HANDSETS IN INDIA
Nokia, the world's biggest mobile phone manufacturer,
is to start making handsets in India.
The company said it was investing in India in order
to meet rising demand for its products in the country.
The Finnish firm said it expected to employ up to
2,000 workers and would invest $100m-150m (£52m-78m), along with its
suppliers, over four years.
CHRISTMAS SPENDING 'SET TO RISE'
Warnings of a poor Christmas for High Street
retailers in the UK are unduly pessimistic, according to a survey from
The survey is predicting a 2% increase in average
spending, despite the impact of rising interest rates.
Consumers are expected to spend £614 ($1,163) on
gifts, food, drink and socialising, compared to £602 in 2003.
But regional variations do emerge with people in
Scotland and London saying they are planning to spend less.
LIMITS IMPOSED ON UKRAINIAN BANKS
Ukraine's central bank has imposed limits on how many
dollars customers can buy to reduce the risk of a run on the country's
currency, the hryvna.
The new rules cap currency exchange at $1,000 (£523)
in any location, and limit withdrawals from ATMs.
The tense political situation following the disputed
presidential election, has provoked people into withdrawing their
savings. The central bank has spent millions on intervention to keep the