UNITED STATES
Consumer spending flat
Consumer spending barely rose and inflation was tame in July, offering a cautionary note on the economy as the Federal Reserve weighs cutting back its massive bond-buying program. Spending, which accounts for more than two-thirds of the nation’s economic activity, could struggle to regain momentum as other data on Friday showed consumer sentiment fell this month. The reports added to a number of signs that have suggested a loss of steam in the economy early in the third quarter. The Department of Commerce said consumer spending ticked up 0.1 percent, restrained by weak outlays on utilities and automobiles. Adjusted for inflation, spending was flat.
GREECE
Union calls for strike
The nation’s main public sector trade union, Adedy, launched a call on Friday for a two-day strike this month in protest against job lay-offs included in an economic overhaul demanded by the country’s creditors. Adedy, in a statement, criticized the government’s “submission” to proposals from the EU and IMF that would “destroy the public sector and the welfare state.” The strike action was called for Sept. 18 and Sept. 19. Greece has agreed to put 12,500 civil servants on a redeployment scheme by the end of this month, as part of a general restructuring of its public sector, in return for the next installment of its EU-IMF rescue loans. Workers have to accept new posts or spend eight months on reduced salaries as alternative posts are found, with the risk of losing their jobs altogether. The government redeployed 4,000 civil servants at the end of July, mostly teaching staff.
FINANCE
GE to spin off lending
General Electric Co (GE) plans to spin off the US consumer lending business of its finance arm with an initial public offering (IPO) of stock that could come early next year, according to the Wall Street Journal. The newspaper also said on Friday that the Fairfield, Connecticut, conglomerate is considering smaller spinoffs or asset sales, but it has started preliminary work on the IPO. The paper cited unnamed sources familiar with the matter. The consumer finance business provides store credit cards to about 55 million people for retailers like Wal-Mart Stores Inc. It accounts for US$50 billion of GE Capital’s US$274 billion in outstanding loans, according to the report.
FRANCE
Reforms bore fruit: Hollande
President Francois Hollande indicated he was more optimistic over the nation’s economic outlook next year, though he stopped short of committing his government to a new target. Hollande told the daily Le Monde that a series of reforms conducted since he took office 15 months ago were producing positive effects on the economy and would keep building momentum. The government’s growth forecast for next year is currently 1.2 percent, but Les Echos newspaper has reported that it has been working with an unpublished estimate about 0.8 percent as it drafts its budget for next year. Hollande is fighting to kickstart growth through tax credits for companies while battling to bring down record joblessness, but his efforts are being complicated by EU-imposed belt-tightening aimed at shrinking the public deficit.
FALLING BEHIND: Samsung shares have declined more than 20 percent this year, as the world’s largest chipmaker struggles in key markets and plays catch-up to rival SK Hynix Samsung Electronics Co is laying off workers in Southeast Asia, Australia and New Zealand as part of a plan to reduce its global headcount by thousands of jobs, sources familiar with the situation said. The layoffs could affect about 10 percent of its workforces in those markets, although the numbers for each subsidiary might vary, said one of the sources, who asked not to be named because the matter is private. Job cuts are planned for other overseas subsidiaries and could reach 10 percent in certain markets, the source said. The South Korean company has about 147,000 in staff overseas, more than half
Taipei is today suspending its US$2.5 trillion stock market as Super Typhoon Krathon approaches Taiwan with strong winds and heavy rain. The nation is not conducting securities, currency or fixed-income trading, statements from its stock and currency exchanges said. Yesterday, schools and offices were closed in several cities and counties in southern and eastern Taiwan, including in the key industrial port city of Kaohsiung. Taiwan, which started canceling flights, ship sailings and some train services earlier this week, has wind and rain advisories in place for much of the island. It regularly experiences typhoons, and in July shut offices and schools as
TECH PARTNERSHIP: The deal with Arizona-based Amkor would provide TSMC with advanced packing and test capacities, a requirement to serve US customers Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is collaborating with Amkor Technology Inc to provide local advanced packaging and test capacities in Arizona to address customer requirements for geographical flexibility in chip manufacturing. As part of the agreement, TSMC, the world’s biggest contract chipmaker, would contract turnkey advanced packaging and test services from Amkor at their planned facility in Peoria, Arizona, a joint statement released yesterday said. TSMC would leverage these services to support its customers, particularly those using TSMC’s advanced wafer fabrication facilities in Phoenix, Arizona, it said. The companies would jointly define the specific packaging technologies, such as TSMC’s Integrated
An Indian factory producing iPhone components resumed work yesterday after a fire that halted production — the third blaze to disrupt Apple Inc’s local supply chain since the start of last year. Local industrial behemoth Tata Group’s plant in Tamil Nadu, which was shut down by the unexplained fire on Saturday, is a key linchpin of Apple’s nascent supply chain in the country. A spokesperson for subsidiary Tata Electronics Pvt yesterday said that the company would restart work in “many areas of the facility today.” “We’ve been working diligently since Saturday to support our team and to identify the cause of the fire,”
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