US unemployment benefit applications fall to 343K

WASHINGTON — The number of Americans applying for unemployment benefits fell 5,000 to a seasonally adjusted 343,000 last week, a sign that employers are adding jobs at modest pace.

The less volatile four-week average dipped 750 to 345,500, the Labor Department said Wednesday.

Weekly applications for unemployment benefits are a proxy for layoffs. The four-week average has fallen 9 percent in the past year.

Job growth has been stable. A separate report showed that companies stepped up hiring in June, a hopeful sign ahead of Friday's employment report for last month.

Payroll provider ADP said businesses added 188,000 jobs in June, up from 134,000 in May and the most since February. Construction firms added 21,000 jobs, a sign the housing recovery is boosting hiring. Small businesses — those with less than 50 employees — added 84,000 jobs.

ADP's survey has frequently diverged from the government's figures. Still, Jennifer Lee, an economist at BMO Capital Markets, said the report and the low number of unemployment benefits were encouraging.

Economists forecast that Friday's report will show the economy added 165,000 jobs in June. That's slightly below the 175,000 gain in May, which was in line with the monthly average over the past two years.

The unemployment rate likely stayed at 7.6 percent.

Nearly 4.6 million Americans received unemployment benefits in the week that ended June 15, the latest period for which data is available. That's about the same as in the previous week. The total number of recipients has fallen 22 percent in the past year.

More hiring could help the economy grow faster later this year. The economy expanded at only a 1.8 percent annual rate in the January-March quarter. Most analysts think it grew at a similarly tepid annual pace between 1.5 percent and 2 percent in the April-June period.

Recent reports have raised hopes for a stronger second half of the year.

A survey by the Institute for Supply Management showed that manufacturing activity expanded in June after shrinking in May. Measures of new orders and production rose. Still, a gauge of hiring fell, indicating that factories cut jobs for a fourth straight month.

A separate report from the Commerce Department said U.S. factories fielded more orders for computers, machinery and other goods in May. And a measure of business investment increased for the third straight month.

The housing recovery continues to strengthen, which should help boost construction jobs. A measure of home prices rose in May from a year ago by the most in seven years, while sales of previously occupied homes surpassed the 5 million mark for the first time in 3 ½ years.

And consumers continue to help the economy with their spending, despite higher taxes that have reduced their take-home pay this year. Spending at retail businesses rose in May. And the improving job market has lifted consumer confidence to its highest point in 5½ years.

23.14 | 0 komentar | Read More

Group finds carcinogen in Pepsi products

NEW YORK — An environmental group said Wednesday that the caramel coloring used in Pepsi still contains a worrisome level of a carcinogen, even after the drink maker said it would change its formula.

In March, PepsiCo Inc. and Coca-Cola Co. both said they would adjust their formulas nationally after California passed a law mandating drinks containing a certain level of carcinogens come with a cancer warning label. The changes were made for drinks sold in California when the law passed.

The chemical is 4-methylimidazole, or 4-Mel, which can form during the cooking process and, as a result, may be found in trace amounts in many foods.

Watchdog group The Center for Environmental Health found via testing that while Coke products no longer test positive for the chemical, Pepsi products sold outside of California still do.

Pepsi said its caramel coloring suppliers are changing their manufacturing process to cut the amount of 4-Mel in its caramel. That process is complete in California and will be finished in February 2014 in the rest of the country. Pepsi said it will also be taken out globally, but did not indicate a timeline.

Meanwhile, the company said the FDA and other regulatory agencies around the world consider Pepsi's caramel coloring safe.

Coca-Cola said it has transitioned to using a modified caramel in U.S. markets beyond California that does not contain Mel-4, so it wouldn't have to have separate inventory of products for different locations. It also said all of its products, whether they have the modified caramel or not, are safe.

The watchdog group Center for Environmental Health said it commissioned Eurofins Analystical laboratory in Metairie, La., to test Coke and Pepsi products from California in May and from across the country in June.

The lab did not find the chemical in California products. And it found no 4-Mel in nine out of 10 Coke products outside of the state. But it found levels of 4-Mel that are 4 to 8 times higher than California safety levels in all 10 Pepsi products purchased outside California, according to the Center for Environmental Health.

Trace amounts of 4-Mel have not been linked to cancer in humans. The American Beverage Association said that California added the coloring to its list of carcinogens with no studies showing that it causes cancer in humans. It noted that the listing was based on a single study in lab mice and rats.

The Food and Drug Administration has also said that a consumer would have to drink more than 1,000 cans of soda a day to reach the doses administered that have shown links to cancer in rodents.

Coca-Cola and PepsiCo account for almost 90 percent of the soda market, according to industry tracker Beverage Digest.

23.14 | 0 komentar | Read More

France calls for 2-week delay in US-EU trade talks

PARIS — The French government said Wednesday it wants the start of major trade negotiations between the United States and the European Union suspended for two weeks amid anger over alleged U.S. eavesdropping on its European allies.

The country, whose Socialist government has never seemed hugely enthusiastic about the free trade deal, will try to get other EU members to agree to the request — but its chances looked slim. The EU Commission, which negotiates for the 28 member states, and Germany showed no signs of agreeing to postpone the start of talks planned for the beginning of next week, which come after months of protracted and painful efforts to find a common European stance.

France was at the heart of those difficulties, insisting on protections for its film and other cultural subsidies.

Just Tuesday night, the Commission said the planned start of technical negotiations in Washington "should not be affected" by the surveillance scandal that has emerged in recent days. But France is again raising its voice in protest.

"It seems wise to us to suspend (the talks) temporarily, for a period of 15 days," French government spokeswoman Najat Vallaud-Belkacem told reporters Wednesday.

After reports that the U.S. National Security Agency bugged EU diplomatic offices in Washington and infiltrated its computer network, Vallaud-Belkacem said mutual trust is needed before launching talks on such a huge trade deal, expected to provide a boost to economies on both sides of the Atlantic by removing tariffs and other barriers to trade.

She said France will first "discuss with our European partners to take a joint decision."

Her boss, President Francois Hollande, had hinted at a threat to trade talks in unusually outraged comments Monday demanding that the United States immediately stop any such eavesdropping.

In Berlin, German government spokesman Steffen Seibert suggested Germany is sticking to the plan for talks, despite anger over the snooping allegations. Speaking to reporters earlier Wednesday, he said that "we support the Commission in its effort to begin the negotiations on July 8."

But Volker Treier, a senior official at the influential German trade association DIHK, told Berlin daily Tagesspiegel that he was concerned about the atmosphere.

"For a free trade agreement there needs to be transparency and trust between the potential partners. The talks will get harder, the greater the distrust is," he told the newspaper Wednesday. "If the United States knew in advance what our negotiating strategy was then we Europeans would be fleeced," he added.

Germany's top security official said bluntly that if his countrymen were worried about U.S. intelligence agencies snooping on their Internet traffic — as claimed by NSA leaker Edward Snowden — then they should stop using American websites such as Google and Facebook.

"Whoever fears their communication is being intercepted in any way should use services that don't go through American servers," Interior Minister Hans-Peter Friedrich said.

The European Commission, meanwhile, insisted that the trans-Atlantic atmosphere needed to clear up for the talks to be successful.

"For such a comprehensive and ambitious negotiation to suceed, there needs to be confidence, transparency and clarity among the negotiating partners," it said in Tuesday's statement.

On Wednesday, the EU trade commissioner's office said it is sticking to its position.

It's unlikely that France could block the talks on its own. Last month, the Commission was given the mandate from all members to start the talks after striking a deal with France about keeping the movie and television business out of the negotiations to shield Europe's audiovisual industry from Hollywood.

EU Trade Commissioner Karel De Gucht said hinging the start of talks on such political issues as the eavesdropping scandal would amount to the EU shooting itself in the foot. The EU, he said, was entering talks out of self-interest, not to be subservient to the United States.

A free trade pact would create a market with common standards and regulations across countries that together account for nearly half the global economy. A recent EU-commissioned study showed that a trade pact could boost the EU's output by 119 billion euro ($159 billion) a year and the U.S. economy by 95 billion euros ($127 billion). For Europe in particular, that extra growth could be crucial to help pay high public debt and bring down unemployment, which is at record highs.

_____

Associated Press writers Raf Casert in Brussels, Frank Jordans in Berlin and Angela Charlton in Paris contributed to this report.

23.14 | 0 komentar | Read More

US trade gap widened in May as exports weakened

WASHINGTON — The U.S. trade deficit widened in May to its highest level in six months as a sluggish global economy depressed U.S. exports. Fewer exports mean U.S. growth in the April-June quarter could be weaker than previously forecast.

The trade deficit rose to $45 billion in May, up 12.1 percent from $40.1 billion in April, the Commerce Department said Wednesday. It was the largest trade gap since November.

Exports slipped 0.3 percent to $187.1 billion. Sales of American farm products dropped to their lowest point in more than two years. U.S. exports have been hurt by recessions in many European countries.

Imports rose 1.9 percent to $232.1 billion. Imports of autos and other nonpetroleum products hit an all-time high.

The U.S. trade deficit is running at an annual rate of $501.2 billion, 6.3 percent lower than last year's gap.

A trade gap can restrain growth because it means consumers and businesses are spending more on foreign goods than companies are taking in from overseas sales.

Paul Dales, senior U.S. economist at Capital Economics, said the larger trade gap for May indicates that economic growth last quarter could be even weaker than the sluggish 1.5 percent annual rate he had previously predicted.

Economists at Barclays said the higher deficit had led them to downgrade their growth forecast for the second quarter from 1.6 percent to 1 percent.

The U.S. economy expanded at only a 1.8 percent annual rate in the first three months of the year, the Commerce Department said last week. That was much slower than its previous estimate of a 2.4 percent rate.

Economists say they think growth will rebound somewhat in the second half of this year as the effect of government spending cuts and tax increases begins to wear off.

For May, exports to the 27-nation European Union were up 6.4 percent. But over the past five months, exports to this region have declined 6.3 percent from the same period in 2012. Europe has been hurt by a prolonged debt crisis, which has led to recessions across the continent.

The U.S. deficit with China jumped 15.6 percent to $27.9 billion in May. That's close to the all-time monthly high set in November. So far this year, the U.S. deficit with China, the largest with any country, is running 3 percent higher than last year.

The United States and China will hold high-level talks in Washington next week. They will seek to resolve differences in such areas as cyber-security, theft of intellectual property and China's currency policies. U.S. manufacturers contend that China is manipulating its currency to gain trade advantages.

Imports of foreign-made autos and auto parts jumped 3.1 percent to a record of $26 billion in May. Petroleum imports surged 4.4 percent to $30.9 billion.

Exports of U.S.-made autos and auto parts also set a record in May of $13.1 billion. But exports of farm products fell to $9.8 billion, the lowest level since September 2010. Shipments of wheat, soybeans and corn were all down.

Slower growth overseas has weighed on U.S. manufacturing this year. But reports show that factories are starting to see some improvement.

The Institute for Supply Management said manufacturing activity grew in June after shrinking in April. And the Commerce Department said orders to U.S. factories rose in May, lifted by the third straight month of stronger business investment.

A housing recovery and steady job growth have helped offset the weakness in manufacturing. And the Federal Reserve said last month that it expects growth to strengthen in the next year.

Chairman Ben Bernanke said the Fed could scale back its bond buying later this year and end it next year if the economy continued to strengthen. His comments sent stocks falling, and the yield on the 10-year Treasury bond jumped.

Stocks have since rebounded and the yield on the 10-year Treasury note has dipped since the middle of last week. Favorable reports on the U.S. economy have helped.

And several Fed members have clarified that any tapering of the Fed's bond buying would hinge on economic improvement, not a calendar date.

23.14 | 0 komentar | Read More

Markets roiled by oil price spike, Portugal woes

LONDON — Financial markets were roiled Wednesday as Egypt's unfolding political crisis pushed the price of oil to its highest level in more than a year and Portugal's government teetered on the edge of collapse.

While the benchmark New York oil price rose above $100 a barrel for the first time since May 2012, stocks in Europe and Asia piled up the losses, particularly in Portugal, where the main PSI stock index was trading 5.4 percent lower after two leading Cabinet members quit the government.

The interest yield on the country's benchmark 10-year bond also spiked over a percentage point higher to 7.70 percent at one point before dropping back to 7.32 percent. Despite coming off highs, it's a clear signal that investors are fretting about the future of the bailed-out country and its efforts to get a handle on its debts.

There are fears that other Cabinet members will quit over the government's austerity program and that may signal early elections and ensuing uncertainty.

"It's all about Portugal midweek where political pressures are breaking investor spirit around the world," said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co.

Among the key indexes in Europe, the FTSE 100 index of leading British shares closed down 1.2 percent at 6,229.87 while Germany's DAX fell 1 percent to 7,829.32. The CAC-40 in France ended 1.1 percent lower at 3,702.01.

Investors, particularly in Europe, are clearly worried that Europe's debt crisis, which has been dormant of late, may be about to erupt again. Over recent months, it has barely been a driver in markets as the focus of attention turned toward monetary policy developments in the U.S. and Japan.

In the U.S., trading was a lot calmer than in Europe — the Dow Jones industrial average was up 0.3 percent at 14,969, while the broader S&P 500 index fell 0.1 percent to 1,612. Wall Street will close at 1 p.m. on Wednesday ahead of the Independence Day holiday on Thursday and will re-open Friday.

Helping to shore up sentiment in the U.S. is an easing over concerns of an imminent change in the U.S. Federal Reserve's monetary policy. The ADP survey showing private payrolls was up 188,000 in May was solid but not major, while the 5,000 fall in weekly jobless claims was fairly insignificant.

However, a fall in the main non-manufacturing index of the Institute for Supply Management to a three-year low of 52.2 in June reined in expectations that the Fed will start reining in its monetary stimulus soon.

"These figures may well indicate that growth seen in the U.S. is faltering," said Brenda Kelly," senior market strategist at IG.

An easing in expectations of an imminent Fed policy change was evident in the performance of the dollar. The euro was up 0.2 percent at $1.3005.

When Wall Street traders return to their desk, the main point of interest will likely be the government's official nonfarm payrolls report for June and that could potentially alter the mood.

Investors around the world were also keeping a close watch on the oil price as Egypt's president, Mohammed Morsi, defied calls to resign despite the demands of millions of protesters and a threat by military to suspend the constitution, disband parliament and install a new leadership.

Egypt is not an oil producer but its control of the Suez canal — one of the world's busiest shipping lanes, which links the Mediterranean with the Red Sea — gives it a crucial role in maintaining global energy supplies.

As a result, the benchmark New York rate has edged up this week and was trading a further $2.26 at $101.86 a barrel.

"The primary reason behind the rally is undoubtedly concerns that the ongoing political turmoil in Egypt may disrupt oil supplies through the Suez Canal," said Fawad Razaqzada, technical analyst at GFT Markets.

Earlier, Asian markets also closed lower with Japan's Nikkei 225 down 0.3 percent to 14,055.56 while Hong Kong's Hang Seng shed 2.5 percent to 20,147.31 and Seoul's Kospi fell 1.6 percent to 1824.66. In China, the Shanghai Composite lost 0.6 percent to 1,994.27 following disappointing manufacturing data.

____

Kay Johnson in Bangkok contributed to this report.

23.14 | 0 komentar | Read More

New England jobless rate ticks up to 6.9 percent

PROVIDENCE, R.I. — The unemployment rate in New England ticked up in May but remains considerably lower than the national rate.

The New England Information Office of the U.S. Bureau of Labor Statistics said Wednesday the rate for the six-state region was 6.9 percent, up from 6.8 percent in April. A year ago, the rate in New England was 7.3 percent.

The national unemployment rate for May was 7.6 percent.

Rhode Island and Connecticut had the highest jobless rates in the region in May, 8.9 percent and 8 percent, respectively.

Maine's rate was 6.8 percent, Massachusetts' was 6.6 percent, New Hampshire's was 5.3 percent and Vermont's was 4.1 percent.

23.14 | 0 komentar | Read More

Friedman returning as Restoration Hardware co-CEO

CORTE MADERA, Calif. — Gary Friedman is returning as chairman and co-CEO at Restoration Hardware, less than a year after stepping aside, as the home products chain buys his new venture, a company called Hierarchy.

In August 2012 the New York Times had reported that Restoration Hardware's board found that Friedman had an inappropriate relationship with a former employee.

The company could not be reached at the time and declined to comment Wednesday.

Friedman started Hierarchy that month and was given a title of Chairman Emeritus, Creator and Curator at Restoration Hardware. He left as co-CEO and Chairman of Corte Madera, Calif.-based Restoration Hardware in October.

Friedman had been CEO since 2001. He's once again co-CEO alongside Carlos Alberini, who was brought on board in 2010.

Restoration Hardware Holdings Inc. is tapping Friedman as it restyles itself as "RH," focusing on high-end furnishings rather than its Americana, nostalgia-based roots. His return is effective Wednesday.

The company, which went public in November, is several years into a turnaround. It was losing money when it was bought by a private equity firm in in 2008. Since then the chain has redesigned stores, revamped its product line and focused on a higher-end market.

It's purchased the exclusive right to develop Friedman's Hierarchy venture and will rebrand it as RH Atelier, developing luxury clothing, accessories, shoes and jewelry. RH Atelier, which will be based in New York, will have its own catalog. Financial terms were not disclosed.

Restoration Hardware is also expanding into other businesses. It plans to start RH Kitchen and Tableware and RH Antiquities late next year. RH Kitchen will concentrate on kitchen furniture, appliances, lighting, cookware, tools, and food. The antiquities business aims to serve the needs of shoppers looking for antiques.

The stock slipped 6 cents to $75.37 in late morning trading.

23.14 | 0 komentar | Read More

Swiss Cabinet sets terms for banks to deal with US

GENEVA — The Swiss Cabinet has agreed to let banks make individual deals on turning over confidential client data to U.S. authorities without facing criminal sanctions under Swiss law.

The seven-member council said in a statement Wednesday that the agreement sets "parameters for cooperation" so that Swiss banks can cut deals to avoid U.S. charges for shielding tax cheats.

But it said the data "can only be supplied within the scope of existing agreements with the U.S.A. in the area of double-taxation via administrative assistance."

Last month, Switzerland's lower house of parliament rejected a proposal from Finance Minister Eveline Widmer-Schlumpf and the rest of the Cabinet to relax secrecy laws, despite the upper chamber's approval.

The Swiss Bankers Association said it welcomed the Cabinet's move because it "will finally create legal certainty."

23.14 | 0 komentar | Read More

US rate on 30-year mortgage falls to 4.29 percent

WASHINGTON — Average U.S. rates on fixed mortgages eased this week after last week's surge, declines that could prompt homebuyers to act quickly before rates rise further.

Freddie Mac says the average on the 30-year loan dropped to 4.29 percent. That's down from 4.46 percent last week, the highest in two years and a full point more than a month ago.

The average on the 15-year mortgage fell to 3.39 percent, down from 3.50 percent last week — the highest since August 2011.

Mortgage rates jumped last week after the Federal Reserve signaled it could slow its monthly bond purchases later this year if the economy keeps improving. A pullback by the Fed would likely send long-term interest rates even higher.

Despite the gains, mortgages are still low by historical standards.

23.14 | 0 komentar | Read More

Survey: US services firms grow slower, hire more

WASHINGTON — U.S. services firms grew at a slower pace in June from May but added more jobs. The figures offered a mixed sign for companies that employ roughly 90 percent of the workforce.

The Institute for Supply Management said Wednesday that its index of service-sector growth fell in June to 52.2. That's down from 53.7 in May and the lowest reading in more than three years. Any reading above 50 indicates expansion.

The index was dragged down by steep drops in new orders and a measure of the business outlook.

Still, a gauge of employment jumped to 54.7, up from 50.1 in May. That's the first increase in five months and suggests services firms hired more briskly last month.

The survey measures growth at businesses that cover most of the job market. They range from construction companies and health care firms to retail businesses and restaurants.

The ISM report comes a day before the government issues its June employment report. That is expected to show employers added 165,000 jobs last month, while the unemployment rate stayed at 7.6 percent.

Growth in the service industry depends largely on consumers, whose spending drives roughly 70 percent of economic activity. The housing rebound and a pickup in consumer spending helped increase the index earlier this year.

Spending at retail businesses rose in May, a sign that solid job growth has encouraged Americans to spend more. And the improving job market has lifted consumer confidence to a 5½-year high.

The ISM's survey of manufacturers, released Monday, found that factory activity expanded in June behind strength in new orders and production. That signaled that manufacturing might be picking up after a weak start to the year.

But a measure of employment fell sharply, suggesting that factories cut jobs in June for a fourth straight month.

23.14 | 0 komentar | Read More