NEWS,30.01.2013

US economy shrinks in fourth quarter

The US economy contracted at a rate of 0.1% in the fourth quarter, according to the government's first estimate on Wednesday.But the economy expanded overall a modest 2.2% for the full year in 2012, a gain from 1.8% in 2013, the Commerce Department said.The fourth quarter estimate was lower than forecast, but came after a strong 3.1% pace in the third quarter."The downturn in real GDP in the fourth quarter primarily reflected downturns in private inventory investment, in federal government spending, in exports, and in state and local government spending," the department said.It stressed that the first estimate of GDP growth is based on incomplete data and is often revised.

US adds more jobs than expected

US private-sector employers added 192 000 jobs in January, more than economists were expecting, a sign of growth in the labor market, a report by a payrolls processor showed on Wednesday.Economists surveyed by Reuters had forecast the ADP National Employment Report would show a gain of 165 000 jobs. December's private payrolls were revised down to an increase of 185 000 from the previously reported 215 000.The report is jointly developed with Moody's Analytics.Small businesses with less than 50 employees did the most hiring this month, adding 115 000 jobs. But large businesses of more than 500 workers cut 2 000 jobs."The job market is slowly, but steadily, improving," Mark Zandi, chief economist of Moody's Analytics, said in a statement.By industry,professional and business services firms led gains with 40 000 jobs while the manufacturing sector fared the worst, cutting 3 000 positions.

    

Europe's economic gloom lifts

Business leaders and consumers in the eurozone sent signals in January that the clouds of economic gloom are lifting slightly, marking the third month running of firming optimism, data from the European Commission showed on Wednesday.Confidence indicators are important pointers to how the economy will perform, and the latest figures suggested that optimism is gaining ground in the eurozone, pulled by Germany in particular and overall also by the construction sector.The Commission's eurozone confidence index rose by 1.4 points from the December level to 89.2 points against a background of easing tensions over the debt crisis.And the index for all 27 members of the European Union also rose by 1.4 points to 90.6 points.In the eurozone, the sector of activity where confidence rose most was the construction industry for which the indicator gained 4.6 points. This reflected orders taken and expectations concerning the need for labour.The reading for confidence expressed by consumers also rose by 2.4 points in January.Confidence in the services sector rose by 1.0 point.However, for industry and the retail sector, the indicators were flat.Sentiment about the outlook for employment was less pessimistic in all sectors of activity than has been the case, both in the eurozone and in the European Union.In the eurozone, confidence rose the most in Germany by 2.5 points, in the Netherlands by 1.0 point, and in Spain by 0.5 points.In Italy it was steady and in France it slipped by 0.3 points.US stock index futures showed little reaction to the ADP report, though futures extended declines later in the morning following data that showed the economy unexpectedly contracted in the fourth quarter.The ADP figures come ahead of the government's much more comprehensive labor market report on Friday, which includes both public and private sector employment."The data suggests that jobs growth is accelerating and bodes well for Friday's payrolls report," said Omer Esiner, analyst at Commonwealth Foreign Exchange in Washington.The government release is expected to show hiring held steady in January with 160 000 jobs created.Economists often refer to the ADP report to fine-tune their expectations for the payrolls numbers, though it is not always accurate in predicting the outcome.

Obama's popularity highest in 4 years

US President Barack Obama's popularity has hit 60%, the highest level since he first took office four years ago, according to a poll released on Wednesday.The survey by ABC television and The Washington Post was made public just a little more than a week after the president's formal swearing-in was witnessed by an estimated one million people in Washington and millions more across the nation.The pollsters credited public approval of the president's inauguration address for his soaring poll numbers.In that address, Obama embraced a liberal agenda that vowed action during his second term on gun reform, gay rights and the environment, among other issues.But while the poll showed he has broad public support, it also found that his popularity is slightly less than that enjoyed by two other re-elected presidents - Bill Clinton and Ronald Reagan - at the start of their second terms.Obama's favourability rating at the start of this second term is higher, however, than that of his predecessor George W Bush at the same point during his tenure.The 60% popularity represents a 10-point increase since last summer, during the heat of the contentious presidential race against Republican challenger Mitt Romney.Obama has a way to go until he matches his all-time highest popularity numbers 79% achieved just days before he took office in January 2009, the pollsters said.The telephone survey of 1 022 adults was taken between 23 to 27 January and had a 3.5% margin of error.

Israel releases frozen Palestinian funds

Israel said on Wednesday it had released $100m of the tariffs and tax money it collects on behalf of the Palestinian Authority, which were frozen last year as punishment for the UN bid. But an Israeli official said it was a one-off measure to ease the financial crisis faced by the Palestinians and was not a sign that the transfers would be renewed."This decision was taken by Prime Minister Benjamin Netanyahu because of the Palestinian Authority's very difficult financial situation," an official at the premier's office told AFP."But this transfer is temporary and affects only funds owed for one month," he added, speaking on condition of anonymity."The prime minister did not commit to continue these transfers."The Palestinians said Israel's decision to transfer money on a one-time basis was effectively "extortion”."Israel's announcement that it will transfer 400m shekels [$107.31m] of our money on a one-time basis means they will continue to carry out extortion on this issue," Palestinian negotiator Saeb Erakat told AFP."Israel is using our money, which it collects, as a sword hanging over our heads," he said."Israel should pay us our money immediately and the international community should condemn this Israeli piracy and stop it immediately," he added."The transfer of the funds on a one-time basis means the financial and political siege is continuing and that nothing has changed in Israeli politics and Netanyahu's approach."Israel in early December announced it would not transfer tax and tariff funds it collects for the Palestinians in response to their successful bid for upgraded UN membership, a move the Jewish state had fiercely opposed.Every month, Israel transfers tens of millions of dollars in customs duties that are levied on goods destined for Palestinian markets that transit through Israeli ports, and which constitute a large percentage of the Palestinian budget.The transfers are governed by the 1994 Paris Protocols that governs economic agreements between Israel and the Palestinians.But Israel often freezes the transfer of funds as a punitive measure in response to diplomatic or political developments viewed as harmful.The measure has deepened an already dire financial crisis faced by the Palestinian Authority, which has frequently been unable to make payroll for its employees over the last year.In response to Israel's freezing of the funds, the Palestinians have urged Arab nations to activate a promised "safety net" of $100m a month to make up the shortfall.But despite pledging to deliver the money, funds have yet to materialise, leaving the Palestinian Authority unable to pay its thousands of government employees, who are still owed half their salaries from November and all their salaries from December.