The U.S. economy grew more slowly over the summer than the government had earlier estimated because businesses cut back more sharply on restocking of shelves. The Commerce Department said Tuesday that the economy grew at an annual rate of 2 percent in the July-September quarter, lower than an initial 2.5 percent estimate made last month. The government also said after-tax incomes fell by the largest amount in two years, reflecting high unemployment and lower pay raises. The downward revision was largely because of a lower estimate for inventory rebuilding. Economists believe this could lead to stronger growthin the current quarter, if businesses foresee more demand and restock shelves.
Italians shun sacrifice, like Euopean Union
Ninety-three percent of Italians believe cutting the country’s hobbling public debt is a top priority, but few are willing to make personal sacrifices to do so, according to an AP-GfK poll released Tuesday. Only about a quarter of Italians favor reforming labor laws to make it easier to fire workers, or raising the retirement age from 65 (and sometimes lower) to 67 — two of the reforms considered critical to curb Italy’s public spending and boost economic growth. But while the European Union is demanding such reforms, 52 percent of Italians still have a favorable view of the EU, and a full 76 percent think Italy should stay in the 17-nation eurozone.
More rate hikes for Postal Service
The cash-strapped U.S. Postal Service is raising rates for its more profitable express mail and priority mail shipping next year, part of its efforts to stave off bankruptcy. The new prices take effect Jan. 22 and include the introduction of a new flat rate of $39.95 for express mail boxes, with separate increases for letters. Previously, prices were $13.25 or higher based on package weight and distance. The Post Office said the rate hikes still make its shipping the best value compared to private companies such as UPS and FedEx. The new prices amount to a roughly 5 percent increase. They are in addition to a previously announced 1-cent hike in first-class mail to 45 cents.
Netflix stock continues to fall
Netflix stock’s free fall accelerated Tuesday as the shares reached a 20-month low amid intensifying concerns about the video subscription service’s ability to overcome public relations problems and competitive pressures. The latest in a wave of share sell-offs followed Netflix Inc.’s decision to raise $400 million from investors by issuing debt and selling 2.86 million shares of its slumping stock. That served as a reminder that Netflix hasn’t been bringing in as much money as management anticipated from a price increase that triggered mass cancellations and damaged the company’s once-sterling brand. Caris &Co. analyst David Miller described the fundraising as “a rhetorical signal” that the company is still struggling.
From Herald news services