Personal Income boosted by Microsoft share handout
January 31, 2005
A rare divident payment of $32 billion by Microsoft in December boosted personal income figures and contributed to nearly a full percentile in consumer spending for the month.
The U.S. Department of Commerce reported that there would only have been an increase in personal income of about 0.6% for December, but the Microsoft pay-out increased this to 3.7%.
An additional 0.8% rise in consumer spending was also attributed solely to the dividend.
However, although the $38 billion tax rebates the US Inland Revenue Services paid out in 2001 under President George W Bush, analysts expect much of the dividend to be reinvested in Microsoft shares, rather than directly entering the high street.
Economic growth at 4.4% for 2004
January 30, 2005
Treasury figures reveal that the US economy grew at a confident 4.4% over 2004, the highest growth rate since 4.5% growth in 1999. Although fourth quarter growth was reported at slightly less than market predictions, at 3.2% instead of an estimated 3.5%, the reports otherwise come as a relief to markets already uneasy at the current cycle of devaluation of the dollar.
Consumer spending was a key engine behind the 2004 growth figures, and was the highest since 2000, despite an overall 1.5% rise in core prices, particularly affected by oil price increases.
In a further show of recovery, 2.2 million extra jobs were created over 2003, and investment in business equipment and software was the highest since 1997.
The news can only help soothe market concerns about the state of the economy, after particular worries over the devaluation of the dollar over the past 3 years has seen central banks look to other currencies, such as the euro, for reserve funds.
Congress report predicts budget gloom
January 25, 2005
A Congressional Budget Office (CBO) report publishes figures that suggests that the budget deficit can only be marginally improved for 2005. This suggests that George W. Bush may struggle to halve the deficit as promised.
Spiralling military operational costs in Iraq, coupled with major legilative changes to social security, as well as planned tax breaks, could see the deficit especially affected by major increases.
However, the CBO stressed that economic growth would particularly impact the figures, with strong growth helping to balance pressures on the deficit.
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