WASHINGTON U.S. wholesale businesses increased their stockpiles at a faster rate in April, responding to a strong gain in sales. The increase could be a good sign for economic growth in the April-June quarter.
The Commerce Department says stockpiles grew 0.6 percent at the wholesale level in April, double the March gain. Sales by wholesale businesses jumped 1.1 percent in April, nearly three times the March sales gain.
Stockpiles at the wholesale level stood at $483.5 billion in April. Thats 25.6 percent above the post-recession low of $384.9 billion in September 2009.
It would take roughly five weeks to exhaust all wholesale stockpiles at the April sales pace. Thats considered a healthy time frame and suggests businesses will keep restocking to meet demand.
When businesses step up restocking, they order more goods. That generally leads to increased factory production and higher economic growth.
Slower growth in inventories held back growth in the January-March quarter. In the first three months of this year, the economy grew at an annual rate of 1.9 percent.
The increase in wholesale inventories was bigger than economists had forecast. That could signal that inventory growth will pick up and boost economic growth in the April-June quarter.
But stockpile growth largely depends on the spending habits of U.S. consumers and businesses.
Weaker job creation in April and May could force some to scale back spending. And pay has risen just 1.7 percent over the past 12 months. Thats slower than the rate of inflation for that period.
Sluggish job growth and weak pay raises threaten to drag on consumer spending, which would weaken growth. Consumer spending accounts for 70 percent of economic activity.
One positive change: Gas prices have tumbled since early April. That could give Americans more money to spend on appliances, vacations and other discretionary purchases.
Many businesses cut back on restocking last summer fearing that the economy was on the verge of another recession. When it became clear that it wasnt, they raced to rebuild stockpiles and keep pace with consumer demand.
Stockpiles at the wholesale level account for about 27 percent of total business inventories. Stockpiles held by retailers make up about one-third of the total. Manufacturing inventories represent about 40 percent of the total.
Now, Google to give advantage to paid advertisers in shopping business - in.news.yahoo.com
Washington, June 1 (ANI): Google will now change its free product search service into a paid one in a bid to generate more revenue from its search engine business, according to a report.
This means consumers in the US who click on Google Shopping will get search results for products such as shoes or handbags that are influenced by how much retailers pay.
In the past, product search results were mainly based on relevance or price, and retailers got free access to shoppers, The Los Angeles Times reports.
According to the paper, it is a big shift for Google, which in the past had resisted using paid instead of 'organic' listings.
The move could help Google compete with online retail giants Amazon and EBay, which dwarf the search giant in shopping-related searches.
Both companies advertise on Google's search engine. (ANI)
Gold Falls Following "Bernanke Curve Ball" as US "Lacks Credible Fiscal Plan" - marketoracle.co.uk
By: Ben_Traynor
WHOLESALE MARKET prices for gold bullion hit a low of $1561 an ounce during Friday's Asian session – 4.8% down on this week's high – while stocks and commodities also fell this morning and major government bond prices gained.
On the currency markets, the Euro dropped back below $1.25 as the Dollar rallied, after Federal Reserve chairman Ben Bernanke yesterday "disappointed" traders by not making a firm commitment to a third round of quantitative easing, known as QE3.
Gold prices managed to recover some ground by Friday lunchtime in London, rising back above $1580 an ounce, but gold bullion was still down 2.5% on the week, having unwound most of last Friday's jump.
Silver bullion meantime dipped below $28 an ounce in early London trading, before it too recovered some ground, adding about 50 cents ahead of the US session.
"Gold bulls were very disappointed by the Bernanke testimony yesterday," says Lynette Tan, investment analyst at Phillip Futures in Singapore.
"Bernanke gave few clues on QE3," adds the latest note from Swiss precious metals group MKS, "and attributed much of the recent job weakness to seasonal factors."
"This morning, we are seeing some support for [precious metals] despite a persistently strong Dollar," says Marc Ground, commodities strategist at Standard Bank.
"This support is most likely coming from the physical market as buyers find current price levels once again more attractive...however, we would not completely discount another leg down."
At his testimony to the Joint Economic Committee on Thursday, Bernanke warned Congress that current US fiscal policy is "clearly unsustainable". The Fed chairman added that the so-called fiscal cliff – the expiration of tax cuts and reduced government spending currently due to happen at the start of 2013 – poses "a significant threat to the recovery".
A day earlier, European Central Bank president Mario Draghi also drew attention to fiscal policy issues, saying on Wednesday that "some of [Europe's] problems have nothing to do with monetary policy...[which should not be used] to compensate for other institutions' lack of action."
Europe "poses significant risks to the US financial system", Bernanke said yesterday.
"The Federal Reserve remains prepared to take action as needed to protect the US financial system and economy in the event that financial stresses escalate," he added. Later in his testimony, Bernanke argued there is "no justification" for fears that QE poses a risk of high inflation.
"[Bernanke is] saying what he has said before," reckons Fabian Eliasson, New York-based vice president of currency sales at Mizuho Corporate Bank.
"[He is] reassuring people that they will act if things deteriorate further."
A day before Bernanke's testimony, Fed vice chair Janet Yellen told an event in Boston she was "convinced that scope remains for [the Fed] to provide further policy accommodation either through its forward guidance or through additional balance-sheet actions".
"Bernanke threw traders a curve ball," complained one Chicago analyst following the Fed chairman's testimony.
"After his vice chair made it seem like [QE] was a foregone conclusion, he really messed people up."
Despite its rhetoric, the Fed is actually tightening policy, argues Grant's Interest Rate Observer publisher Jim Grant. In an interview with CNBC this week, Grant pointed out that the Fed's balance sheet has contracted over the last three months.
"The Fed is withdrawing stimulus even as more and more [Fed policymakers] are talking about QE3," said Grant, who nevertheless says he expects there will be a third round of quantitative easing.
Here in Europe meantime, Spain is due to ask the European Union to inject funds into its banking sector, according to a Reuters report which cites EU and German officials.
"The government of Spain has realized the seriousness of their problem," the newswire quotes a senior German official.
Spanish banks hold €184 billion in real estate loans described as "problematic" by the Economy Ministry, news agency Bloomberg reports.
Ratings agency Fitch downgraded Spain's sovereign credit rating from A to BBB Thursday, putting it two notches above junk.
Fitch also warned Thursday that it will cut its rating for the US next year if it does sufficiently address its fiscal problems.
"The United States is the only [AAA-rated] country which does not have a credible fiscal consolidation plan," said Fitch sovereign ratings analyst Ed Parker.
China, the world's biggest buyer of gold bullion in the six months to March, is due to publish several pieces of key economic data this weekend, including the latest consumer price inflation, money supply and trade figures.
China's central bank cut interest rates yesterday for the first time since early 2009, a move that surprised many analysts.
"This rate cut is a clear indication the government sees further weakness in the May economic data," reckons Stephen Green, head of research, Greater China at Standard Chartered in Hong Kong.
By Ben Traynor
BullionVault.com
Gold price chart, no delay | Buy gold online at live prices
Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK's longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics.(c) BullionVault 2012
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