NEWS,31.01.2013

Income surge releaves US consumers

American income growth surged in December as companies rushed to make dividend payments before higher tax rates set in, while buoyant wage growth also gave a lift to households. US personal income rose 2.6% last month, the biggest increase in eight years, the Commerce Department said on Thursday. While much of the gain was due to special payments aimed at beating tax increases due to begin this month, wages still grew at one of the faster rates seen last year. That should lend support to consumer spending and provide some underlying momentum for the economy despite a surprise contraction in gross domestic product during the fourth quarter."Even abstracting from the one-off surge in dividend payments ... the general tone of this report was quite encouraging," said Millan Mulraine, an economist at TD Securities in New York.The increase in overall personal income was well above analysts' expectations for a 0.8% gain. However, another economic report showed an increase in new jobless claims last week, and US stocks traded lower as investors sifted through the mixed data, while prices for US Treasuries were higher.The big rise in incomes put consumers on stronger footing entering the new year, even if the gains may not have been distributed evenly throughout the workforce. Extra dividend payments likely went to the nation's wealthier households who derive more of their income from investments.Still, wages and salary payments grew 0.6% last month, building on a sizable 0.9% gain in November.The income gains helped push the saving rate, the amount of disposable income households socked away, to 6.5%, the highest since May 2009. That offers a cushion for consumer spending as the temporary boost in incomes from investments unwinds and households deal with higher tax rates that took effect this month.Last month, consumer spending rose a modest 0.2%, which was just below the pace expected by analysts.The Commerce Department report also showed cooling inflation, which could help the US Federal Reserve continue easy-money policies aimed at boosting employment.Prices rose 1.3% in the 12 months through December, down a tenth from the reading in November and well below the Fed's 2% target. A core price reading, which strips out volatile food and energy prices to provide a better sense of inflation trends, was up a tame 1.4% from a year ago. A separate report from the Labour Department showed initial claims for state unemployment benefits increased 38 000 last week to 368 000. However, the increase followed a week where new claims were at their lowest in five years and still pointed to an economy where employers are adding jobs, albeit at a lackluster pace. The four-week moving average for new claims, which provides a better sense of underlying trends, gained 250 to 352 000.A report on Friday is expected to show employers added 160 000 jobs to their payrolls in January after an increase of 155 000 in December. The unemployment rate is seen holding steady at 7.8%.The number of planned layoffs at US firms rose in January from the prior month, but declined from a year earlier, another report showed on Thursday. Employers announced 40 430 job cuts this month, up 24.2% from 32 556 in December, according to the report from consultants Challenger, Gray & Christmas, Inc. Layoffs were down 24.4% from January 2012.

Worldwide tablet sales soar

Worldwide tablet sales jumped in the fourth quarter beyond even some of the most optimistic forecasts to 52.5 million, with Android-powered devices pacing growth, a survey showed on Thursday.The preliminary survey by business research firm IDC showed the tablet market grew 75.3% year over year in the quarter and rocketed 74.3% from the previous quarter's total of 30.1 million.IDC said the strongest growth came from Android, including tablets made by South Korea's Samsung and Taiwan's Asus, which makes a Google-branded Nexus tablet.Apple remained the biggest seller, but its market share was under 50%, IDC said. The survey found that Microsoft, which launched its new Surface tablet in the quarter, failed to break into the top five sellers and shipped a modest 900 000 of the devices in the quarter.Overall, the market's strong gains came from a spate of new product launches, including the iPad mini, and lower prices, which encouraged buyers over the holiday shopping season, IDC said."We expected a very strong fourth quarter, and the market didn't disappoint," said IDC analyst Tom Mainelli."The record-breaking quarter stands in stark contrast to the PC market, which saw shipments decline during the quarter for the first time in more than five years."Apple's iPad held its top position with 22.9 million units shipped. That was up 48% from a year earlier, but lower than overall market growth.As a result, Apple's market share declined for a second quarter in a row to 43.6% from 46.4% in the third quarter.Samsung, the number two vendor, saw year-on-year growth of 263%, selling 7.9 million tablets and grabbing a 15.1% market share.IDC said Amazon, which does not provide its own sales data, delivered some six million tablets in the quarter to retain its spot as the number three vendor.That represented 26.8% growth, giving Amazon a market share of 11.5%, IDC said.Fourth place belonged to Asus, which sold 3.1 million tablets, year-on-year growth of more than 400%. That gave the Taiwan-based firm a 5.8% market share.Barnes & Noble sold one million of its Nook tablets and accounted to 1.9% of the market, the survey found.IDC analyst Ryan Reith said Microsoft will need to shift its strategy to compete better in the tablet market."There is no question that Microsoft is in this tablet race to compete for the long haul," he said, calling the market reaction to Surface "muted.""We believe that Microsoft and its partners need to quickly adjust to the market realities of smaller screens and lower prices. In the long run, consumers may grow to believe that high-end computing tablets with desktop operating systems are worth a higher premium than other tablets, but until then (selling prices) on Windows 8 and Windows RT devices need to come down to drive higher volumes."

Ukraine economy in official recession

 

Kiev Ukraine's economy plunged into recession in the final quarter of 2012 with GDP contracting 2.7%, the second quarter running of negative growth, the statistics office said.Gross domestic product in Ukraine contracted 2.7% in the fourth quarter of 2012 compared with the same period last year. The economy had already shrunk by 1.2% in the third quarter.For the whole of 2012, growth was almost stagnant at 0.2% compared with 5.2% in 2011 and the projection in the budget for growth of 3.9%.Ukraine, which was one of the European states worst hit by the 2009 economic crisis, is hugely vulnerable to the current global slowdown due to its dependence on metals exports.

Bitter taste for German chocolate makers

German antitrust authorities have fined 11 chocolate makers €60m for colluding to rig the price of confectionary.The Federal Cartel Office says the offences committed by companies, including Kraft and Nestle, occurred between 2004 and 2008.The offences include agreeing on how much to increase the price of chocolate bars when the cost of raw materials rose sharply in 2007.The cartel office said in a statement on Thursday that the companies "simply ceased competing with each other and piled the price rises on to consumers".It said that Mars avoided a fine by alerting authorities to the illegal practices.

Nappy hunters bare Norwegian bottoms

Southern Norway is in the midst of a nappy shortage after a supermarket price war lured enterprising bulk shoppers from eastern Europe who have cleaned out the shelves, customs officials and retailers said.Norway is one of the world's most expensive countries. However, supermarkets in the south trying to lure local customers by undercutting rivals on the price of nappies inadvertently made it profitable enough for residents of nearby countries to start trading in them."They buy every last diaper [nappy], I mean everything we have on the shelves, throw it in the back of their car and take them home, where they sell it for a nice profit," says Terje Ragnar Hansen, a regional director for retail chain Rema 1000."It's not stealing and it's not even criminal but it's a big problem, ... they leave nothing for our regular customers.Customers come into Norway from Sweden, drive along the coast to fill their cars, then take a ferry back to the continent, said Helge Breilid, the chief of customs in Kristiansand on Norway's southern coast.Some have been stopped with nappies worth up to $9 100, roughly 80 000 nappies, a legal shipment even though Norway is not part of the European Union. "They told us that the only reason they came to Norway was to drive around and buy nappies to bring back home and resell," Breilid said. "These people mainly come from Poland and Lithuania, and we have no reason to believe that they are part of any criminal gangs."Norwegian nappies cost as little as $5.47 for 50, less than half of the prevailing price in Lithuania. Coincidentally, the internet is heaving with Lithuanian sellers advertising Norwegian nappies.

French civil servants go on strike

French civil servants went on strike on Thursday for better pay in their first mass show of dissent since the Socialist Francois Hollande became president last year.Dozens of street protests were planned across the country as part of the day of action called by three of the several unions which represent France's 5.2 million state workers.The main complaint of the unions relates to the index used to calculate salaries, which has been frozen for three years.Raising the index by one point would cost €800m if applied only to central government workers or €1.8bn if applied to all civil servants, according to the state audit authority.Jean-Marc Canon of the CGT union said the situation was "absolutely catastrophic", and noted that nearly a million civil servants were being paid the minimum wage.The unions are seeking to put pressure on Civil Service Minister Marylise Lebranchu ahead of pay talks next Thursday.She has acknowledged "the difficult situation facing civil servants" but hinted that pay rises were unlikely given the budgetary constraints on the government.The government was due later on Thursday to announce how many civil servants had answered the strike call.