Consumer spending cools in June
Growth in spending by consumers significantly cooled in June despite another solid gain in incomes, the Commerce Department said Monday. Personal consumption expenditures increased 0.2 percent, the smallest in four months, compared to a downwardly revised 0.7 percent jump in May. Personal income rose 0.4 percent for the third straight month. But instead of spending the extra money, as they did in May, consumers saved much of it. The portion of disposable income saved rose to 4.8 percent in June compared to 4.6 percent the previous month.
Manufacturing levels off
Manufacturing cooled in July from the highest level in five months, a sign of fitful progress in U.S. industry. The Institute for Supply Management's index fell to 52.7 from a June reading of 53.5 that was the fastest since the start of the year, a report showed Monday. Readings greater than 50 indicate expansion. The group's employment measure declined from a month earlier and order backlogs slumped. A pickup in the ISM's orders index to a seven-month high and increased production indicate steady consumer spending is underpinning activity at U.S. factories. Without stronger overseas markets and a rebound in business investment, acceleration in manufacturing may prove difficult to achieve.
Kraft Heinz recalls cheese slices
The Kraft Heinz Co. has recalled some of its individually wrapped cheese products over concerns that the plastic packaging could stick to the slice and cause a potential choking hazard. The voluntary recall was in response to 10 consumer complaints about the wrapping. The company said the recall covered about 36,000 cases of 3-pound and 4-pound Kraft Singles American and White American cheese products sent to retailers in the U.S., Puerto Rico and Grand Cayman. Those cases were stamped with the numbers S54 and S55. The recalled cheese products had use-by dates of Dec. 29, 2015, through Jan. 4, 2016.
Nokia sells digital mapping unit
Nokia, the Finnish telecommunications company, said Monday that it had sold its Here digital mapping unit to a consortium of German automakers for 2.8 billion euros, or about $3 billion. The announcement signals the latest chapter in Nokia's transformation, as the company tries to rebound from the demise of its once world-leading mobile phone unit, which was sold to Microsoft last year. As part of the changes, the Finnish company has pared its operations to focus almost entirely on its telecom network infrastructure business, which provides communications equipment to some of the world's largest carriers, like AT&T and China Mobile. The Here mapping unit is the largest global competitor to Google Maps.
Coal giant files for Chapter 11
Alpha Natural Resources, once a powerhouse of the U.S. coal industry, filed for Chapter 11 bankruptcy protection so it may emerge from the grip of a $3 billion debt at a time when utilities are switching to natural gas and coal prices are plummeting. Alpha Natural Resources borrowed heavily in 2011 to buy Massey Energy for $7.1 billion, seeking to acquire an empire of Appalachian coal mines in the hope that China would be a growth market for exports. That deal turned out to be a disaster.
Puerto Rico fails to make debt payment
The government of Puerto Rico confirmed that it failed to make a $58 million debt payment in a significant escalation of the debt crisis facing the U.S. island territory. Puerto Rico made a partial payment of $628,000 in interest but could not afford to make the remainder, which was due Saturday, because the legislature did not appropriate the funds, according to the Government Development Bank.