A lifetime of perks in UAE help cushion wealth gap
UMM AL-QUWAIN, United Arab Emirates (AP) — The United Arab Emirates contains the world’s tallest building, an artificial indoor ski slope and man-made islands shaped like the world. Dubai’s fleet of police cars includes a $2.5 million Bugatti Veyron and a $500,000 Lamborghini Aventador.
Look past the blinding glitz, though, and you discover a gulf separating the elite and their riches from most Emiratis. Yet in contrast to much of the world, a note of complaint is seldom heard here, and the reason is simple: Most Emiratis live lives of comfort that they owe to a bounty of perks and benefits from the government.
The welfare system, built more than four decades ago under Abu Dhabi’s Sheik Zayed bin Sultan Al Nahyan, helped forge long-standing political loyalty.
The question is how long it will last. Officials and economists warn that the lavish government spending that has long sustained a robust Emirati middle class could eventually be curtailed. Analysts say the United Arab Emirates’ economic viability requires guiding more Emiratis into self-sustaining private businesses and weaning them from the state’s openhanded patronage.
EU cuts growth forecasts as big economies falter
BRUSSELS (AP) — The European Union cut its already low economic growth forecasts further on Tuesday, indicating the recovery will remain sluggish amid problems for the bigger countries, particularly France and Germany.
The official forecast for growth this year in the 18-country eurozone was cut to 0.8 per cent from a prediction of 1.2 per cent made in the spring. Indicating little good was expected next year too, it reduced the 2015 prediction from 1.7 per cent to 1.1 per cent.
Unemployment in the currency union was forecast to decrease at a painfully slow rate — after 11.6 per cent this year, it is expected to dip to 11.3 per cent next year and 10.8 per cent in 2016.
The broader 28-nation EU, which includes non-euro members like Britain and Sweden, was expected to grow 1.3 per cent this year from a previous 1.6 per cent forecast.
Alibaba profit down, invests in mobile, marketing
NEW YORK (AP) — Alibaba’s financial results in its first quarter as a publicly traded company highlight its strategy of plowing its profit back into investments, particularly in mobile commerce and marketing.
The Chinese e-commerce powerhouse said net income fell 39 per cent in the July-September period despite a 54 per cent surge in revenue on strong user demand.
The results released Tuesday show that Alibaba has a similar strategy as U.S. e-commerce retailer Amazon: Invest profit back into the company to spur long-term growth. Last month, Amazon.com Inc. reported a large loss in the third quarter despite a 20 per cent increase in revenue.
But the two companies operate differently. Amazon works with third-party sellers but it also sells and distributes products directly, while Alibaba does not compete with its merchants or hold inventory. Instead, Alibaba serves as a conduit that links buyers and sellers of all kinds. It makes money from transaction fees and marketing services.
Arby’s CEO on customized orders, quality meats
NEW YORK (AP) — Arby’s, the chain known for its roast beef sandwiches, is trying to stand out in the crowded fast-food industry. It’s marketing its meats as being of superior quality and pushing to let customers know they can order sandwiches sans onions or mayo.
It launched TV ads this summer featuring close-ups of its meats on a carving board. Actor Ving Rhames provides a voiceover: “We have the meats!” And next week, it’s introducing a line of steak sandwiches for the suggested price of $5.49.
The efforts come after the struggling chain was jettisoned by Wendy’s in 2011 and acquired by private equity firm Roark Capital Group. The year before, Arby’s had said sales tumbled 9 per cent, following a 6 per cent drop the previous year. Deteriorating franchisee finances led to the closure of many locations.
US factory orders slip in September
WASHINGTON (AP) — Orders to U.S. factories declined in September, dragged by falling demand in the volatile aircraft category.
The Commerce Department said Tuesday that orders retreated 0.6 per cent in September, after having plunged 10 per cent in August, also due largely to plummeting demand for aircraft.
There are usually dramatic monthly swings in demand for aircraft, which before falling in September and August had soared by 315.6 per cent in July. Excluding the volatile transportation sector, factory orders have been flat for the past two months.
Orders at aluminum, iron and steel mills rose in September, as did demand for furniture and motor vehicles. But those gains were offset, in part, by declining orders for construction machinery, electronics products and consumer goods.
US trade deficit expands in September
WASHINGTON (AP) — The U.S. trade deficit rose in September as exports slumped, a sign that the world’s biggest economy is starting to feel the impact of weakening global growth.
The Commerce Department said Tuesday that the trade deficit rose 7.6 per cent to $43 billion in September. That marks the first increase in four months. A deficit occurs when a country imports more than it exports.
Economic slowdowns in Europe and China appear to have hurt demand for American-made goods. Since September, the dollar has appreciated in value more than 4 per cent against the euro to $1.25, making U.S. products less competitively priced abroad.
Exports fell 1.5 per cent to $195.6 billion, led by declines in shipments of industrial supplies, consumer products and capital goods such as engines and computers.
Pace of US home price growth slows in September
WASHINGTON (AP) — The U.S. housing market cooled off in September, as home prices rose at an ever slowing pace.
Prices increased 5.6 per cent in September compared to a year ago, real estate data provider CoreLogic said Tuesday. That’s down from annual gains of 6.4 per cent in August and 6.8 per cent in July.
Home prices had been climbing by as much as 12 per cent annually toward the end of last year. But the acceleration out of the housing crash that triggered the Great Recession has become unsustainable. Wages have barely budged after inflation and lending standards remain relatively strict. This makes it difficult for families to pay the higher home prices.
CoreLogic forecasts that the slowdown will continue, with annual home price growth slipping below 5 per cent by September 2015. This should help bolster home sales for first-time buyers with adequate incomes and down payment savings, yet there are few signs that younger Americans are buying real estate.
Ford issues 5 recalls covering 202,000 vehicles
DETROIT (AP) — Ford is recalling more than 202,000 cars, vans and trucks in North America in five separate recalls to fix gas leaks, air bag sensors, stalling and other issues.
The company says the problems have caused one accident, but it’s not aware of injuries in any of the cases.
The biggest of the recalls announced Tuesday affects about 135,000 F-150 pickups and Ford Flex family haulers from the 2014 model year. Faulty passenger seat weight sensors can stop air bags from inflating in crashes. Dealers will widen a gap between the seat frame and track, and then recalibrate the sensors. Also covered are some 2009 through 2014 F-150s that were serviced for seat track problems this year.
By The Associated Press=
The Dow Jones industrial average edged up 17.60 points, or 0.1 per cent, to 17,383.84. The Standard & Poor’s 500 index fell 5.71 points, or 0.3 per cent, to 2,012.10. The Nasdaq composite dropped 15.27 points, or 0.3 per cent, to 4,623.64.
U.S. benchmark crude slumped $1.59, or 2 per cent, to $77.19 a barrel, the lowest price since October 2011. Brent crude, the international benchmark, fell $2.34, or 2.8 per cent, to $82.43 a barrel. Wholesale gasoline dropped 4 cents to $2.078 a gallon. Heating oil lost 4.7 cents to $2.443 a gallon. Natural gas gained 8.3 cents to $4.129 per 1,000 cubic feet.