After suffering the sharpest contraction since the recession ended, the U.S. economy rebounded this spring, growing at a solid 4 percent annual rate in the second quarter. ¶ Robust consumer spending helped drive the expansion, while businesses rebuilt their inventories. U.S. exports spiked, helping to offset a jump in imports. State and local governments also increased their spending after cutting back during the first quarter. The growth rate beat analysts’ expectations. ¶ Many economists have written off the decline in growth during the first quarter as an anomaly caused by brutally cold weather and poor accounting of the impact of the Affordable Care Act. New revisions to government data show the economy shrank at an annual rate of 2.1 percent in the first quarter.
United Parcel Service lowered its full-year profit outlook as the company plans to spend $175 million on improving its shipping during the holiday crush. UPS said it would expand operations on the day after Thanksgiving and make improvements to its Orion software that helps drivers plot routes. Last year, harsh winter weather and a last-minute surge in online orders caused UPS to miss Christmas deliveries.
Amazon, discussing a dispute with the publisher Hachette, said it would like to see most e-books priced at $9.99. Lowering prices by roughly one-third, Amazon said, would encourage customers to buy more books and boost the size of the e-book market. (Amazon chief executive Jeffrey P. Bezos owns The Washington Post.)
Johnson & Johnson plans to ask doctors to return its power morcellators, a controversial surgical device that may inadvertently spread cancer in women being treated for fibroids.
Yum Brands said reports of improper food handling by Chinese supplier Shanghai Husi Food has had a “significant, negative impact” on same-store sales at its KFC and Pizza Hut outlets in China in the past 10 days.
Manchester United Football Club’s American owners are set to raise about $150 million by selling more shares in the soccer team on the New York Stock Exchange. The English Premier League club said the Glazer family is selling 8 million shares with reduced voting rights, which equates to about 5 percent of the business.
Major League Baseball’s arbitration panel ruled in favor of the Nationals in their dispute with the Orioles over TV rights fees from the Mid-Atlantic Sports Network.
The Redskins have launched a new campaign to defend the team name, headed by popular former players who visited a Montana Indian reservation.
T-Mobile US has another suitor on its hands: Upstart French telecom company Iliad offered $15 billion for a majority stake in the fourth-largest U.S. cellphone company. Iliad is injecting itself into the courtship of T-Mobile and Sprint, the No. 3 U.S. cellphone carrier. Sprint has reportedly been in talks with T-Mobile for months. Iliad is offering $15 billion in cash for 57 percent of T-Mobile US.
● The Carlyle Group’s economic net income, which is a popular method of measuring profitability at investment firms, more than doubled, to $318 million — in large part because of its U.S. buyout funds and performance fees from its growing European activities. Carlyle earned $6.5 billion from the sale of companies in the second quarter, while at the same time it poured $3.4 billion in cash into new investments.
DirecTV’s second-quarter profit climbed to $806 million, from $660 million a year ago, as the World Cup lured Latin American customers.
Exxon Mobil profit climbed 28 percent, to $8.78 billion, but oil and gas production slipped 6 percent. The sale of power and utility assets in Hong Kong helped increase its earnings by $1.2 billion. It benefited from higher oil prices in the quarter, both in the United States and abroad.
LinkedIn posted a loss of $1 million, from a profit of $3.7 million a year ago, but still beat estimates.
MasterCard profit rose 9.8 percent to $931 million, as card spending increased.
Tesla Motors widened its losses to $61.9 million, from $30.5 million a year ago, as it prepared for the launch of a new SUV early next year and the construction of a massive new battery plant.
Time Warner Cable profit climbed to $499 million, from $481 million a year ago, even as it lost 152,000 net residential video customers in the quarter. Demand for broadband services remained strong.
Twitter’s net loss widened to $144.6 million, from $42 million a year earlier. But it beat estimates. Its membership reached 271 million, with year-over-year growth at 24 percent. Twitter said it engaged more users over the quarter because of new tools, such as real-time scoring and voting ballots around the World Cup and new user profiles that mimicked the look of Facebook.●
The U.S. economy has added more than 200,000 jobs for six straight months, the longest streak since the mid-1990s. And 209,000 net new jobs were created in July, though the unemployment rate edged up slightly to 6.2 percent as more workers joined the labor force. The report was the latest in a string of upbeat data suggesting the country’s recovery has shifted into the next gear.
The stock market on Thursday had its worst one-day drop since February, with the S&P, Dow and Nasdaq indexes plunging about 2 percent.
Spain registered its fastest economic growth since before the financial crisis in the second quarter, becoming one of the brightest spots in the euro zone, although a sharp drop in consumer prices showed that the economy faced risks.
U.S. consumer confidence soared in July to the highest level in almost seven years as Americans grew more upbeat about the labor market and the outlook for the economy.
Homeownership hit a 19-year low in the second quarter as tight finances drove Americans toward renting. The seasonally adjusted homeownership rate fell to 64.8 percent, the lowest level since the second quarter of 1995.
Home prices rose in May from a year earlier at the weakest pace in 15 months as sales remained modest in the spring buying season. The Standard & Poor’s/Case-Shiller 20-city home price index increased 9.3 percent in May from 12 months earlier. That’s the smallest annual gain since February 2013.
Diane Rehm was among 22 people to be awarded the National Medal of Arts or National Humanities Medal by President Obama.
The Affordable Care Act, among other forces, has made Medicare’s financial structure more stable, trustees said in an annual report.
Metrorail Silver Line made its maiden rush-hour commutes through five new stations along 11.7 miles of new track.
About 35 percent of U.S. consumers with credit files have debts in collections, a study found.
— From news services and staff reports
The debut of General Electric’s credit-card unit is the year’s largest initial public offering. It brings GE a step closer to reducing its footprint in financial services, a line of business that nearly kneecapped the company in the 2008 financial crisis. GE will return to its industrial manufacturing roots and focus on making products like power generators and jet engines.