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Globescan: Happy Tidings
The Labour Department said its Consumer Price Index, excluding the volatile food and energy components, increased 0.3 per cent last month, the biggest gain since August 2011, following a 0.2 per cent rise in December.
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Rising rents and healthcare costs lifted underlying US consumer price inflation in January by the most in nearly 4-1/2 years, providing support for the view that the Federal Reserve could gradually raise interest rates this year as forecast. The Labour Department said its Consumer Price Index, excluding the volatile food and energy components, increased 0.3 per cent last month, the biggest gain since August 2011, following a 0.2 per cent rise in December. “This was a firm, broad-based rise in core inflation that should dispel the notion, evident in market-based measures of inflation compensation, that the economy can’t generate any inflation,” said Omair Sharif, a rate sales strategist.
Google said it was adding fresh foods to its grocery delivery service, ramping up its challenge to Amazon and a long list of delivery startups. The US online giant said its Google Express service — which was launched in 2013 by offering non-perishable goods — would include a range of fresh items in test markets in Los Angeles and San Francisco. “Everyone wants milk delivered with their cookies — that’s why we’re excited to start adding fresh groceries to Google Express,” said product manager Prabhu Balasubramanian. He said consumers liked the service but that “we’ve also heard your feedback that you’d love for Express to help you check off your entire grocery list, including fruit, vegetables, seafood, dairy, and frozen foods”.
The US Department of Justice filed a motion seeking to compel Apple to comply with a judge’s order to unlock the encrypted iPhone belonging to one of the San Bernardino shooters, portraying the tech giant’s refusal as a “marketing strategy”. In response, a senior Apple executive characterised the Justice Department’s filing as an effort to argue its case in the media before the company has a chance to respond. The back and forth escalated a showdown between the Obama administration and Silicon Valley over security and privacy that ignited in February. The Federal Bureau of Investigation is seeking the tech company’s help to access shooter Syed Rizwan Farook’s phone by disabling some of its passcode protections. The company so far has pushed back and won three extra days to respond to the order.
Amazon.com is quietly inviting drivers for its new “on-demand” delivery service to handle its standard packages, as the online retailer known for low prices and razor-thin profit margins looks to speed up delivery times and tamp down its growing multi-billion dollar logistics bill. The move, which has not been announced publicly, is the latest sign that the world’s biggest e-commerce company wants to control more of its own deliveries. The company plans to lease its own fleet of jets, and CEO Jeff Bezos eventually wants to use drones to get packages to customers. It might also create a logistics network to compete with United Parcel Service, FedEx Corp and the patchwork of local carriers which currently deliver Amazon packages.
Chancellor Angela Merkel hoped the EU summit on migration would provide at least a show of European unity in the refugee crisis. Instead, it ended in disarray. An Austrian plan to cap the entry of asylum-seekers at just 80 a day left the German leader isolated, Greece threatening to scupper any deal on Brexit in response, and leaders more divided than ever over the EU’s biggest challenge in decades. European leaders, from Berlin to Vienna to Athens, are now improvising and pursuing often contradictory policies. Refugee arrivals have picked up, with more than 4,800 arriving in Greece from Turkey — a rate not far off the autumn peak, when an average of 7,000 people a day were arriving.
The International Monetary Fund (IMF) said its board re-elected managing director Christine Lagarde to a second five-year term, starting on 5 July 2016. Lagarde — the only candidate nominated for the post — was elected “by consensus”, the IMF said in a statement. Lagarde, who took over the post in 2011, has overseen an easing of Europe’s sovereign debt crisis and has implemented changes to give greater influence in the Fund to emerging markets including China and Brazil.
American Express said it would overhaul its management, streamline its marketing operations and cut jobs as it looks to reduce $1 billion in costs over the next two years. The company is facing stiff competition in the co-branding business and has lost lucrative long-term contracts from companies such as Fidelity Investments and warehouse club operator Costco Wholesale. The credit card issuer, which said it would cut jobs as part of the restructuring programme, did not give any details about the number of employees it plans to lay off. “At this time, we do not know what the magnitude of those reductions will be, as decisions on specific positions affected are yet to be made,” AmEx chief executive Kenneth Chenault said.
Takata is considering trimming its global air bag operations, including consolidating production plants in Europe and shedding overseas jobs. The move would be part of a restructuring plan by the Japanese firm which is struggling with a global recall of potentially faulty airbag inflators. Takata could also sell some non-core businesses as part of a plan to raise money to pay for the cost of recalling about 50 million vehicles due to exploding air bags, which has caused at least 10 deaths so far, it said. Investigators are trying to identify the root cause of the defective air bags.
The chief executive of Uber Technologies said the company is burning through more than a billion dollars a year in China, where it is locked in a fierce battle with larger local rival Didi Kuaidi to lure consumers with cut-price deals. Uber’s China unit boosted its valuation last month to more than $8 billion after it raised over $1 billion in its latest funding round.