■ US economy
Construction spending up
US construction spending rose for a third straight month in November as the lowest mortgage rates in three decades spurred record home sales. The amount spent on homes, hotels and highways increased 0.3 percent from the previous month after the October gain was revised up to 1 percent, the Commerce Department said. November spending of US$843.2 billion was the most since May. The increase adds to evidence that a sluggish economic recovery is gathering momentum. Last month the Institute for Supply Management's manufacturing index rose the most in 11 years, and home sales probably reached a record last year. New vehicle sales by the two biggest automakers jumped in December.
■ Meeting
Takenaka cancels US visit
Japan's Economic and Fiscal Policy Minister Heizo Takenaka canceled his trip to the US because his meeting with President George W. Bush's new top economic policy adviser was called off, Kyodo News reported. Washington told Takenaka, who was to leave for the US. Wednesday, that Stephen Friedman will not meet him because such a meeting could give the wrong impression to the US Congress, the report said, without citing anyone. Takenaka was expected to visit the US to seek continued support from the Bush administration for Prime Minister Junichiro Koizumi's plan to accelerate bank disposals of bad loans and boost falling prices in Japan, the report said.
■ Economy
S Koreans lose confidence
South Korean business confidence fell for a fourth month in December to its lowest in 14 months, reflecting rising defaults on household debt and tension between the US and North Korea over its nuclear program. The Federation of Korean Industries' business confidence index dropped to 91.9 from 95.6 in November, the federation said. That was the lowest since October 2001. A reading below 100 indicates more companies are pessimistic than optimistic about the economic outlook. Businesses are "concerned about slowing consumption as government measures to curb household debt are increasing the number of defaulters," the federation said in a statement.
■ Wine industry
Americans start to dry out
A decade of unprecedented growth in the US wine industry appears to be at an end, as California wineries face their first major slump in a decade, the Los Angeles Times reported yesterday. The past 10 years saw a 50 percent rise in the number of California wineries and wine prices. But since the fall, at least three wineries have filed for bankruptcy protection and there have been a number of high-profile mergers, as weakened wineries are swallowed up by the competition, the Times reported. "We are going to lose scores of wineries to bankruptcy," Joe Ciatti, one of the state's largest brokers of bulk wine, told the Times, calculating that as many as 200 of the state's wineries, or more than 20 percent could go out of business or be bought by a larger competitor. Analysts said the slump has been caused by a number of factors including a worldwide glut of wine, flat consumption, and grape prices that have plummeted as much as 75 percent over the last two years, according to the Times.
Agencies
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