US retail sales rose for a fifth straight month last month as consumers hit the malls in droves at the start of the holiday shopping season, evidence the recovery gathered steam in the fourth quarter.
Sales rose a solid 0.8 percent as shoppers snapped up clothing, sporting goods and other items, data from the US Department of Commerce showed on Tuesday.
The strong sales report, which contained upward revisions for both September and October, prompted economists to ratchet their fourth-quarter economic growth forecasts upward by as much as a full percentage point.
The economy grew at a tepid 2.5 percent annual rate in the third quarter and some forecasters now expect growth around 3.5 percent in the final three months of the year.
“The fourth-quarter is shaping up to be relatively decent, probably north of three percent,” said Ryan Sweet, a senior economist at Moody’s Analytics in West Chester, Pennsylvania.
Stocks on Wall Street rose on the data, but a weak earnings report from Best Buy Co Inc curbed gains. The top consumer electronics chain reported a decline in quarterly results and same-store sales and cut its full-year outlook.
US Federal Reserve officials meeting on Tuesday could nod to brighter prospects in a post-meeting statement at about 2:15pm. However, analysts did not expect it to waver in its commitment to buy US$600 billion in government debt to bolster the economy.
The US Federal Reserve on Tuesday steered a steady course through the shallow economic recovery, sticking to a massive spending plan and interest rates close to zero for the second year.
The central bank’s policymakers said the recovery was too weak to reduce high unemployment, a major challenge to getting the world’s largest economy back on a sustainable course, and inflation trends were worryingly weak.
“Information received since the Federal Open Market Committee [FOMC] met in November confirms that the economic recovery is continuing, though at a rate that has been insufficient to bring down unemployment,” the committee said in a statement at the end of the panel’s final meeting of the year.
As widely expected, the FOMC left the key federal funds rate target between zero and 0.25 percent, where it has been since December last year in an attempt to support recovery from the Great Recession.
The panel “continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels for the federal funds rate for an extended period,” it said, repeating its familiar wording.
The Fed noted “disappointingly slow” progress toward reaching the goals of its mandate to foster maximum unemployment and price stability, saying underlying inflation was hovering at a “somewhat low” level.
TARIFF TRADE-OFF: Machinery exports to China dropped after Beijing ended its tariff reductions in June, while potential new tariffs fueled ‘front-loaded’ orders to the US The nation’s machinery exports to the US amounted to US$7.19 billion last year, surpassing the US$6.86 billion to China to become the largest export destination for the local machinery industry, the Taiwan Association of Machinery Industry (TAMI, 台灣機械公會) said in a report on Jan. 10. It came as some manufacturers brought forward or “front-loaded” US-bound shipments as required by customers ahead of potential tariffs imposed by the new US administration, the association said. During his campaign, US president-elect Donald Trump threatened tariffs of as high as 60 percent on Chinese goods and 10 percent to 20 percent on imports from other countries.
Taiwanese manufacturers have a chance to play a key role in the humanoid robot supply chain, Tongtai Machine and Tool Co (東台精機) chairman Yen Jui-hsiung (嚴瑞雄) said yesterday. That is because Taiwanese companies are capable of making key parts needed for humanoid robots to move, such as harmonic drives and planetary gearboxes, Yen said. This ability to produce these key elements could help Taiwanese manufacturers “become part of the US supply chain,” he added. Yen made the remarks a day after Nvidia Corp cofounder and chief executive officer Jensen Huang (黃仁勳) said his company and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) are jointly
United Microelectronics Corp (UMC, 聯電) expects its addressable market to grow by a low single-digit percentage this year, lower than the overall foundry industry’s 15 percent expansion and the global semiconductor industry’s 10 percent growth, the contract chipmaker said yesterday after reporting the worst profit in four-and-a-half years in the fourth quarter of last year. Growth would be fueled by demand for artificial intelligence (AI) servers, a moderate recovery in consumer electronics and an increase in semiconductor content, UMC said. “UMC’s goal is to outgrow our addressable market while maintaining our structural profitability,” UMC copresident Jason Wang (王石) told an online earnings
MARKET SHIFTS: Exports to the US soared more than 120 percent to almost one quarter, while ASEAN has steadily increased to 18.5 percent on rising tech sales The proportion of Taiwan’s exports directed to China, including Hong Kong, declined by more than 12 percentage points last year compared with its peak in 2020, the Ministry of Finance said on Thursday last week. The decrease reflects the ongoing restructuring of global supply chains, driven by escalating trade tensions between Beijing and Washington. Data compiled by the ministry showed China and Hong Kong accounted for 31.7 percent of Taiwan’s total outbound sales last year, a drop of 12.2 percentage points from a high of 43.9 percent in 2020. In addition to increasing trade conflicts between China and the US, the ministry said
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