US consumer spending rises 0.3% in March

Americans increased their spending by 0.3% in March in a sign of the continuing recovery for the US economy.

The rise, revealed in a Commerce Department report, also showed that personal incomes rose 0.4%.

Economists closely watch consumer confidence and spending patterns because their spending accounts for 70% of economic activity in the US.

Last week, figures showed that US economic growth slowed in the first quarter of the year.

'Healthy trend'

The spending and income data released by the US Commerce Department was more encouraging.

Falling unemployment and relatively warm weather appear to have boosted spending this year.

January to March was the warmest first quarter the US has experienced since 1895, according to the National Oceanic and Atmospheric Administration.

That encouraged Americans to dine out and go shopping, economists say.

Spending for February was revised from an increase of 0.8% to 0.9%.

"The trend is good from the perspective that incomes are outpacing spending, so we don't see consumers dipping into savings as much," said Kathy Lien, head of research at GFT Forex.

"Of course, markets like increased spending, but in this situation it's a healthy trend in terms of reducing household debt levels," she said.

The big event for economists this week comes on Friday, with the release of the jobs report for April.

Meanwhile, separate data published on Monday pointed to a slowdown in industrial activity in the US Midwest region.

The Chicago Purchasing Managers Index - which is based on a monthly survey of large businesses in and around the major US city - fell to 56.2 in April, its lowest level in 29 months.

Although the index level indicated that the region's economy was still expanding - as does any reading above 50 - it was much lower than the 61 level expected by economists.

Canada, Barbados ties remain strong

A TOP Canadian business official said Barbados is not a tax haven! Rather, this country is a low tax jurisdiction and everything done here is compliant with Canadian laws.

This vote of confidence in Barbados’ image in the global financial arena, was highlighted yesterday by Honourable Perrin Beatty who is in the island on a two-day visit. France’s President Nicholas Sarcozy had dubbed the island a tax haven.

“Barbados is a low tax jurisdiction, but not a tax haven – everything is compliant with Canadian law,” Beatty said.

He also said that relations between Canada and Barbados remain strong.

Speaking yesterday at the Hilton, Beatty believes that despite the changes in Canadian tax laws which have raised some apprehensions in Barbados, there is great potential in Barbados which still has a competitive advantage.

“The Tax Information Exchange Agreements (TIEAS), do increase the competition for Barbados, but Barbados has a competitive advantage,” he said.

He explained, “First there is expertise that is here that has been built up over years, companies experience services here that are world class and that is a strong competitive advantage , there are a large number of Canadian companies already domiciled here and that creates a critical mass that makes it attractive for others to come.”

Beatty believes that there are a lot of opportunities for Barbados doing more business with Canada . “We have long established relationships, there is an substantial expatriate community in Canada and many Canadians domiciled here as well.”

He said that Canada is a growing economy , and that they have weathered the global recession quite well . “We have virtually no tariffs on goods coming into Canada, a shortage of skills in Canada because our population is aging so the demand for skills has significantly increased. Of course Tourism – the world is becoming a more dangerous place and Barbados hasa reputation for being a place that is safe and welcoming. It is still an attractive market for people looking at vacationing, it is charming, historic and beautiful” he highlighted.

In terms of manufacturing , Beatty said that this country has to pick niches where there are strengths and synergies. “However, manufacturing is a tough sector to be in these days because of competition from Asia so you need to look for areas where they are competitive advantages,” he added.

Barbados Advocate