US economy grew 2.5% in Q2

RAPPLER: BY AGENCE FRANCE-PRESSE

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WASHINGTON, USA – The US economy grew at an annual rate of 2.5% in the second quarter, the Commerce Department said Thursday, September 26, leaving its prior estimate unchanged.

Analysts had expected that second-quarter gross domestic product (GDP) expanded at a slightly stronger 2.6% pace.

The world’s largest economy grew 1.1% in the first quarter.

“With the third estimate for the second quarter, the general picture of economic growth remains largely the same,” the Commerce Department said.

Revisions offset each other in the data, leaving last month’s estimate unchanged.

Inventory investment was lower than previously estimated, amid weaker spending by food and beverage stores and information industries.

Exports of goods and services also were revised lower.

But state and local government spending was revised upward, particularly in investment in structures.

Overall, the pace of economic growth in the April-June period was lackluster and well below the momentum needed to boost job growth.

Analysts expect that growth slowed sharply in the current third quarter that ends Monday.

Macroeconomic Advisers puts the third-quarter pace at 1.7%, while Moody’s Analytics revised down its tracking estimate to 1.4% Wednesday after weaker-than-expected durable goods orders and new-home sales.

The Federal Reserve last week cut its growth forecast for this year to 2% to 2.3% as it unexpectedly announced it would keep an open throttle on its easy-money policy.

Fed Chairman Ben Bernanke said that the central bank could still begin reducing its $85 billion a month bond purchases, known as quantitative easing (QE) in the next 3 months, but only if the outlook for the economy strengthened.

READ: Fed leaves stimulus unchanged at $85-B, no taper

“If the data confirm our basic outlook, if we gain more confidence in that outlook… then we could move later this year,” he said after a two-day Federal Open Market Committee policy meeting.

READ: Fed cuts 2013-2014 US economic growth forecast

The Fed’s preferred measure of inflation — the personal consumption expenditures (PCE) price index for goods and services — fell 0.1% in the second quarter, according to the Commerce Department data.

“Worryingly, it looks like even this relatively modest growth is only being achieved by firms cutting prices,” said Chris Williamson, chief economist at Markit.

“That was the first time these prices have fallen since the dark days of early 2009 and points to a general lack of demand growth.” – Rappler.com

Country imports less oil in first half

THE COUNTRY’S oil import bill decreased in the first half of the year on the back of less crude oil shipments during the period, data from the Energy department showed.

Net imports — the difference between the country’s oil imports and exports — fell 8.01% to $6.096 billion in the January-June period from $6.627 billion in the same six months last year. This is equivalent to a volume of 53.590 million barrels of oil, down 2.88% from 55.182 million barrels.

Total imports dropped by 8.15% to $6.603 billion in the first half this year from $7.189 billion in the same period last year due to less shipments — which slid by 2.93% to 58.289 million barrels from 60.050 million barrels.

Specifically, crude oil imports decreased by 22.32% to $2.837 billion from $3.652 billion, outpacing the increased imports of finished petroleum products, which inched up by 6.47% to $3.766 billion from $3.537 billion.

In terms of volume, the country imported a total 25.821 million barrels of crude oil in the first semester, 17.46% less than the 31.283 million barrels in the same period last year.

The volume of imported finished products, on the other hand, rose by 12.87% to 32.468 million barrels from 28.766 million barrels.

Meanwhile, the country’s petroleum exports dipped by 9.73% to $507.2 million in the first six months of the year from $561.9 million in the same period last year, mainly because of decreased exports of refined petroleum products.

Earnings from the export of finished products fell 17.87% to $431.6 million from $525.5 million. Earnings from the export of crude oil, on the other hand, doubled to $75.6 million from $36.4 million.

In terms of volume, the country exported a total 4.698 million barrels of oil, down by 3.49% from 4.868 million barrels. Crude oil accounted for 706,000 barrels (from 326,000 barrels), while finished products made for 3.992 million barrels (from 4.542 million barrels). — Claire-Ann Marie C. Feliciano

US stocks rally as Q2 growth estimate hiked

BY AGENCE FRANCE-PRESSE
POSTED ON 08/30/2013 10:31 AM

STOCKS UP. The Dow Jones rises following an upgrade to the 2nd-quarter GDP growth of the US. Photo by AFP

STOCKS UP. The Dow Jones rises following an upgrade to the 2nd-quarter GDP growth of the US. Photo by AFP

NEW YORK CITY, United States – US stocks Thursday (Friday, August 30 in Manila) closed higher following an upgrade to US 2nd-quarter economic growth and a shift in expectations away from an immediate military strike on Syria.

The Dow Jones Industrial Average rose 16.44 (0.11%) to 14,840.95.

The broad-based S&P 500 added 3.21 (0.2%) at 1,638.17, while the tech-rich Nasdaq Composite Index increased 26.95 (0.75%) to 3,620.30.

US economic growth in the second quarter came in at an annual rate of 2.5%, faster than the original estimate of 1.7%, the Commerce Department said.

Stronger consumer spending and exports underpinned the pickup from the first quarter’s sluggish 1.1% pace, while imports grew more slowly than originally estimated, the department said.

In addition, market watchers have been calmed by an apparent shift from the US and other western powers in the timing of any military strike against Syria in response to its alleged chemical warfare attack on its people.

“There just seems to be less urgency about an attack any time soon,” said Alec Young, global equity strategist for S&P Capital IQ. “The stress level has come down a little.”

Dow component Verizon rose 2.7% after British telecommunications giant Vodafone said it is in talks regarding a possible sale of its stake in Verizon. The stake is said to be worth more than $100 billion. Vodafone’s US-traded shares rose 8.1%.

Oil giants Exxon Mobil and Chevron, both components of the Dow, fell 1.8% and 1.2% as oil prices retreated on diminished Syria anxiety.

Microsoft, another Dow component, gained 1.6% on reports that the tech giant is considering a strategic investment in Foursquare, which provides recommendations on restaurants and other services by geographic area.

Fashion house Guess surged 12.9% after forecasting full-year earnings in the range of $1.78-$1.92 a share, whereas analysts currently project earnings of $1.80. Results in North America were strong, but Southern Europe remains “challenging” and the company is “beginning to see a slowdown in China,” it said.

Bond prices rose. The yield on the 10-year Treasury bond fell to 2.75% from 2.78% late Wednesday, while the 30-year dropped to 3.7% from 3.75%. Prices and yields move inversely. – Rappler.com

 

China trade surplus falls 29.6% as imports gain

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BY AGENCE FRANCE-PRESSE
POSTED ON 08/08/2013 12:05 PM  | UPDATED 08/08/2013 12:11 PM

This general view shows a central business district in Beijing. AFP PHOTO / WANG ZHAO

This general view shows a central business district in Beijing. AFP PHOTO / WANG ZHAO

BEIJING, China – China’s July trade surplus fell 29.6% year-on-year to $17.8 billion, government data showed Thursday as import gain outpaced exports.

Exports increased 5.1% year-on-year to $186.0 billion, according to figures from Customs, while imports rose 10.9% to $168.2 billion.

The results marked a rebound in both exports and imports after they had declined in June, with the gain in imports being the first since April.

The trade data come after mixed messages on China’s economy last week when private and official surveys of the country’s important manufacturing sector showed differing results.

British banking giant HSBC’s purchasing managers’ index indicated contraction while the government’s showed a surprise expansion.

China’s economy managed growth of 7.8% in 2012, its slowest since 1999.

The economy has since weakened further, with growth in the April-June period dipping to 7.5%, from 7.7% in the first quarter and 7.9% in October-December. – Rappler.com

D&L to start exporting biodegradable plastic

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INDUSTRIAL MANUFACTURER D&L Industries, Inc. expects to begin shipments of its biodegradable plastic product to Japan and Europe by the third quarter, a senior company official said late last week.

“The product we’re developing will be initially sold to Japan and other countries in Europe that are looking for biodegradable plastics,” Alvin D. Lao, D&L executive vice-president and chief financial officer, said in a telephone interview last Friday when asked when the company will begin exporting Bionolle Starcla.

“Maybe by the third quarter — in July or August — [we will sell] either directly to users like grocery chains and to plastic bag manufacturers who will be selling to the groceries.”

Last January, D&L signed a deal with Japan-based Showa Denko K.K. to manufacture Bionolle Starcla, a starch-based biopolymer that decomposes within one to two months upon exposure to microorganisms.

D&L had described Bionolle Starcla — which will be manufactured at the company’s plant in Calamba City, Laguna — as an environmentally friendly alternative to non-biodegradable plastic used for shopping bags.

“Studies have shown that in countries with high GDP (gross domestic product), consumption of plastics is much higher,” Mr. Lao explained, adding that “even if demand here (in the Philippines) is strong, the plastic bag markets in Japan and Europe are much bigger — those are what we want to tap first.”

D&L began operations in 1963 by outsourcing and supplying colorants and color-matching services. It was incorporated in 1971, later diversifying into the manufacture, marketing, and distribution of other chemicals and additives, and listing on the Philippine Stock Exchange in December 2012.

The company owns specialty fats and oils maker Oleo-Fats, Inc. plastics manufacturers First in Colours, Inc. and D&L Polymers & Colours, Inc., as well as aerosol producer Aero-Pack Industries, Inc.

It currently has six plants in Quezon City, Manila, and Laguna.

D&L posted a net income last year of P1.18 billion, 52.92% more than P771.64 million in 2011 on the back of higher revenues as sales of high-margin, specialty products managed to offset a sales dip in the firm’s traditional low-margin items. In the same comparative periods, revenues, consisting of net sales and management service fees, expanded by 82% to P6.37 billion from P3.50 billion, while cost of sales nearly doubled to P4.85 billion from P2.44 billion.

Shares of the listed company gained 13 centavos or 1.90% to P6.98 apiece on Friday last week from P6.85 each last Thursday. — F. J. G. de la Fuente