1 US growth revised upwards (BBC) The US economy
grew at a faster pace than previously thought in the fourth quarter of 2015,
according to the latest official figures. The US economy grew at an annualised
pace of 1% in the quarter, compared with an initial estimate of 0.7%.
Most economists had taken a more pessimistic view,
expecting the figure would be revised downwards. But businesses bought more
stock than previously estimated, which meant inventory levels were $13bn
higher. The downside is that next month's growth figures may be lower than
expected if businesses do get round to cutting back on inventory spending.
Chris Williamson, chief economist at research firm
Markit, said: "Unfortunately, the cause of the upward revision bodes ill
for the first quarter. The GDP number was revised higher in part due to a
bigger than previously thought contribution from inventories, something which
often happens due to weaker than expected demand, meaning inventories could act
as a drag in the first quarter as excess stocks levels are wound down
again."
Cheap oil and lower heating bills from a mild winter
has helped consumer confidence. But some economists fear that the slowdown in
consumer spending could get worse. The chair of the US central bank, the
Federal Reserve, Janet Yellen has indicated that rates could rise gradually
through the year if the economy grows strongly enough.
However, many economists believe US growth will be
held back by slowing economies round the world from China to Brazil, pushing
down the prices of raw materials and leading to deflation. A Reuters survey
this month estimated that the top 30 global oil companies had cut their budgets
by an average of 40%.
2 Tesco considering 39,000 staff cut (Graham Ruddick
in The Guardian) Tesco is considering cutting store staff by 39,000 over the
next three years as Britain’s biggest supermarket group attempts to reverse a
slump in profits.
The potential job losses, revealed in a leaked
document, are the equivalent of Tesco shedding one in six employees, either by
cutting jobs or reducing hours. Tesco confirmed the validity of the document
but said it had modelled various scenarios and had no plans to announce further
job losses.
The group, which employs more than 300,000 people in
the UK, cut thousands of jobs last year as its new boss, Dave Lewis, tried to
turn around the company’s financial performance. The retailer reported a £6.4bn
pre-tax loss last year, one of the biggest in British corporate history.
Tesco’s large out-of-town supermarkets have suffered
as British households have changed shopping habits, moving away from buying
food in one weekly shop and turning increasingly to convenience stores, online
and the discounters Aldi and Lidl. Tesco is also being investigated by the Serious
Fraud Office after a £326m black hole was discovered in its accounts.
Roughly 45,000 people leave Tesco every year through
natural wastage, meaning the cuts could be achieved without redundancies if the
company chooses to not replace departing employees. Britain’s big four
supermarkets have already cut thousands of jobs in the last year as they adapt
to falling sales in their supermarkets. Last year Tesco, Sainsbury’s and
Morrisons closed dozens of shops.
In contrast, Aldi and Lidl, the German discounters,
are hiring thousands of workers. Earlier this month Aldi announced it would
create 5,000 jobs in the UK this year for the opening of 80 new shops.
3 The more connected, the more you prosper (Khaleej
Times) It's a lesson everyone from a Mafia member to an Ivy-League applicant
knows only too well: It pays to be connected.
And it's something that countries striving to
improve the lot of their citizens should pay heed to as well. Global
consultants McKinsey found that the more tied-in a country is to the rest of
the world, the better its economy fares. Being connected doesn't stop at trade
and finances. It's also about people - primarily the number of immigrants a
nation has - and the amount of data streaming across a country's borders.
Putting it all together, the McKinsey Global
Institute ranked 139 countries by how linked they are to the rest of the world.
At the top is the tiny island state of Singapore, which has successfully made
itself into a regional centre in Asia, and the Netherlands, one of Europe's
main digital hubs.
The US comes in third, followed by Germany. China
ranks seventh. At the bottom is another island nation, Seychelles, and Sierra
Leone. Japan, the world's third-largest economy with a host of global brands,
comes in surprisingly low, at No. 24, mainly due to its limits on immigration.
The report reckons that the world economy as a whole
benefited to the tune of about $7.8 trillion in 2014 from the flow of goods,
services, finance and data across borders. "Countries that are open to global
flows increase their GDP," said Susan Lund, a partner at the institute who
is located in Washington.
World trade growth has slowed markedly. And global
capital flows have collapsed, after peaking at close to $12 trillion in 2007
before the onset of the financial crisis. Yet the baton has been taken up by an
explosion in the transmission of data around the world. Half of Facebook's
users had at least one international friend in 2015, up from just 16 per cent
in 2012.
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