Many analysts were upbeat about the prospects for the
US economy, with the increase in production coming on the heels of news
of a recovery in retail sales.
"This is very consistent with an economy growing
at 3.5 to 4.0%. It is congruent with job growth and consumer
optimism," Comerica chief economist David Littman said of the
The US economy grew at a respectable annual rate of
3.7% in the three months between July and September, while jobs growth
averaged 178,000 during the same period.
While the employment figures are not spectacular,
experts believe they are enough to whittle away at America's 5.4%
A breakdown of the latest production figures shows
mining output drove the increase, surging 2.1%, while factory output
rose 0.3%. But utility output dropped 1.4%.
Meanwhile, the amount of factory capacity in use
during the month rose to 77.6% — its highest level since May 2001.
LATIN AMERICA SEES STRONG GROWTH
Latin America's economy grew by 5.5% in 2004, its
best performance since 1980, while exports registered their best
performance in two decades.
The United Nations' Economic Commission for Latin
America and the Caribbean said the region grew by 5.5% this year.
The Inter-American Development Bank (IADB) said
regional exports reached $445.1bn (£227bn;331bn euros) in 2004.
Doubts about the strength of the US recovery and
overheating of the Chinese economy do however pose risks for 2005.
Both organisations also warned that high oil prices
raise the risk of either inflation or recession.
Nevertheless, the Economic Commission for Latin
America and the Caribbean (ECLAC) still forecasts growth of 4% for 2005.
Strong recovery in some countries, such as Venezuela
and Uruguay, boosted the overall performance of the region.
ECLAC also said that the six largest Latin American
economies (Argentina, Brazil, Chile, Colombia, Mexico and Venezuela)
grew by more than 3% for only the second time in 20 years.
Chinese and US economic strength helped boost
exports, as did strong demand for agricultural and mining products.
In fact, Latin American exports to China grew 34%, to
Higher oil prices also helped boost exports, as
Mexico and Venezuela are important oil exporters.
Regional blocs as well as free trade agreements with
the US contributed to the region's strong performance, the IADB said
AIRBUS A380 IN $2BN OVER BUDGET (BOX)
The Airbus A380 superjumbo project is running 1.45bn
euros (£1bn; $1.9bn) over budget, the company's majority owner EADS has
"That is indeed a lot, that is indeed
hefty," EADS co-chief executive Rainer Hertrich told journalists in
Total costs for the double-decker aircraft are now
estimated to be more than 12bn euros, the company said.
Due to enter service in 2006, the A380 will replace
the Boeing 747 jumbo as the world's biggest passenger aircraft.
But despite the increase in costs, the jet is on
schedule and its inaugural flight should take place next year, the
ASIA TO FUEL AIR TRAVEL GROWTH
Global air traffic is set to be boosted in the next
three years by a rise in travel between Europe and Asia, thanks to
growth in both China and India.
Cargo volumes will also enjoy growth but airlines'
finances will take time to recover, a new report claims, as rising oil
prices hit profits.
Global airline body IATA said international passenger
numbers will rise 6% annually between 2005 and 2008.
IATA warned that carriers will struggle after making
losses of $5bn this year.
General economic trends were positive for the airline
industry, the organisation said in a report published last Wednesday.
The booming economies of China and India are set to
fuel growth in passenger numbers.
Traffic within the Asia-Pacific region is forecast to
rise by 8.3% over the period while traffic between Europe and Asia could
grow by 7.1%. Cargo volumes, driven by the health of international
trade, are forecast to rise 6%.
CHINA TO PLACE DUTIES ON TEXTILES
China is to impose tariffs on textile exports
following criticism from other producers that it may distort world
markets after a quota system is ended.
The move may reassure major trading partners,
including the United States, that China will not flood the market after
quotas end on 1 January 2005.
China, which made 17% of the world's textiles in
2003, said the move was designed to spur higher-quality goods.
The US is considering import tariffs to protect
domestic textile producers.
China's move, reported by state media, may placate US
producers and reduce the prospect of a potentially damaging trade
IMF AGREES FRESH TURKEY FUNDING
Turkey has agreed a draft proposal with the
International Monetary Fund to borrow $10bn (£5.19bn), extending its
ongoing financial support until 2007.
Turkey's current $18.6bn loan agreement with the IMF
expires in February and the new follow-on deal would see it get fresh
support between 2005 and 2007.
In return for the funding, Turkey would be expected
to keep inflation under control and introduce market reforms.
Turkey's economy has steadily recovered from a severe
crisis in 2001.
Economic growth has averaged 6-7% in the past three
years, ahead of IMF forecasts, while inflation fell below 10% this year
for the first time in 30 years.
However, Turkey has a huge debt burden while its
current account deficit has swelled to $10.7bn this year.
EU-TURKEY TALKS SET FOR OCTOBER
The EU has offered to begin membership talks with
Turkey next year, with October 3 given as a start date.
EU leaders said the aim of the talks — which could
take up to 15 years — would be full membership, but Turkey's entry
could not be guaranteed.
Discussion between EU leaders on finalising the offer
resumes at the two-day summit in Brussels, last week.
EU leaders warned Turkey that it would have to take
steps to recognise Cyprus before the talks started.
BUSH VOWS PENSION FUND SHAKE-UP
US President George W Bush has vowed to push through
big reforms to the Social Security programme in his next term.
"Now is the time to work together to confront
the problem... the crisis is now," he told business executives and
economists at the White House.
Mr Bush is proposing part-privatisation of the state
pension fund, which will come under increasing pressure as baby-boomers
retire. Democrats, unions and groups for the elderly are opposed to the
STRONG QUARTERLY GROWTH FOR NIKE
Nike has reported its best-ever second quarter
earnings, helped by strong demand for its athletic shoes and Converse
The global sports giant said it posted a profit of
$261.9m (£135.6m), for the three months to 30 November, up from $179.1m
in the same period last year. Revenues increased 11% to $3.1bn, from
$2.8bn for the same period in 2003.
SYMANTEC IN $13BN VERITAS MERGER
Global security software maker Symantec is to take
over Veritas Software in a merger deal valued at $13.5bn (£7bn).
The all-share deal will see Symantec swap 1.1242
shares of common stock for each Veritas share.
After the deal Symantec shareholders will own 60% of
the combined company, with Veritas shareholders owning 40%.
STORMY YEAR FOR PROPERTY INSURERS
A string of storms, typhoons and earthquakes has made
2004 the most expensive year on record for property insurers, according
to Swiss Re.
The world's second biggest insurer said disasters
around the globe have seen property claims reach $42bn (£21.5bn).
"2004 reinforces the trend towards higher
losses," said Swiss Re. Tightly packed populations in the areas
involved in natural and man-made disasters were to partly to blame for
the rise in claims, it said.
Some 95% of insurance claims were for natural
catastrophes, with the rest attributed to made-made events.
JOBLESS LEVEL CONTINUES TO FALL
The number of people out of work in the UK fell by
29,000 between August and October to 1.39 million, the latest official
figures have shown.
The amount of people claiming jobless benefit last
month also fell, by 3,400 to 833,200, according to the Office for
National Statistics (ONS).
MILLIONS 'TO LOSE TEXTILE JOBS'
Millions of the world's poorest textile trade workers
will lose their jobs under new trade rules to be introduced in the new
year, a charity has warned.
The World Trade Organisation (WTO) is to end its
Multi-Fibre Agreement (MFA) on midnight of December 31.
Christian Aid condemned the move, saying it would see
almost a million jobs in Bangladesh alone being axed.
However, supporters of the change claim it will mean
increased efficiency and lower costs for Western consumers.
J&J AGREES $25.4BN GUIDANT DEAL
Pharmaceutical giant Johnson & Johnson has agreed
to buy medical technology firm Guidant for $25.4bn (£13n).
Guidant is a key producer of equipment that combats
heart problems such as implant defibrillators and pacemakers.
CARLYLE BUYS INTO CHINA PACIFIC
Carlyle Group, a US buyout fund, will pay $400m
($206m) for a 25% stake in insurance company China Pacific Life.
The purchase will be China's biggest private equity
Carlyle is working in partnership with US insurer
Prudential and the move will give both firms access to China's rapidly
KIDDE ACCEPTS £1.4BN TAKEOVER BID
British fire equipment manufacturer Kidde has agreed
a £1.44bn ($2.8bn) takeover by US manufacturer United Technologies (UTC).
Kidde said UTC's offer of 165p per share, plus a 2p
special interim dividend, was a "fair price".
In October, Kidde had rejected UTC's previous offer
of 160p a share, saying the bid undervalued the company.
US RAISES INTEREST RATES TO 2.25%
The US Federal Reserve has raised rates by a quarter
percentage point to 2.25% — its fifth increase since June.
Encouraged by the country's economic performance, the
Fed's policy-makers voted unanimously for the move.
Announcing the decision, the Fed added that future
increases would remain "at a pace that is likely to be
The current round of rate increases began in June,
when the central bank ordered its first rise in four years, with rates
at historic lows of 1%.
US MOBILE GROUPS CONFIRM MERGER
US mobile groups Sprint and Nextel have agreed to
merge in a deal that will create the nation's third largest mobile phone
The new company will be known as Sprint Nextel and
will serve 35 million subscribers, drawing in revenues of $40bn
BRAZIL APPROVES BANKRUPTCY REFORM
A major reform of Brazil's bankruptcy laws has been
approved by the country's Congress, in a move which it is hoped will cut
the cost of borrowing.
The bill, proposed in 1993, has finally been approved
by the leadership of President Luiz Inacio Lula da Silva.
The old law, dating from 1945, gave priority first to
workers, second to tax revenue and finally to creditors.
The new legislation changes this, giving priority to
creditors and limiting payments to workers.
BUSINESS CONFIDENCE DIPS IN JAPAN
Business confidence among Japanese manufacturers has
weakened for the first time since March 2003, the quarterly Tankan
survey has found.
Slower economic growth, rising oil prices, a stronger
yen and weaker exports were blamed for the fall.
December's confidence level was below that seen in
September, the Bank of Japan said. However, September's reading was the
strongest for 13 years.
US TRADE GAP BALLOONED IN OCTOBER
The US trade deficit widened by more than expected in
October, hitting record levels after higher oil prices raised import
costs, figures have shown
The trade shortfall was $55.5bn (£29bn), up 9% from
September, the Commerce Department said. That pushed the 10 month
deficit to $500.5bn.
Imports rose by 3.4%, while exports increased by only
A weaker dollar also increased the cost of imports,
though this should help drive export demand in coming months.
BANK WARNS ON PERSONAL DEBT BOOM
The rapid growth of personal debt could threaten the
UK's financial stability, the Bank of England has warned.
UK household debt is rising at 15% a year, faster
than in the US and most major European countries.
The bank said it was particularly worried about the
amount of unsecured debt, such as credit cards.