China considers same tax rate for domestic, overseas firms (AFP)
AFP - Chinese lawmakers have mulled a draft law that would impose a 25 percent income tax on both domestic and foreign firms, eliminating the preferential rate for overseas companies, according to state media.
Retail sales, inflation measure fall (Reuters)
2008.10.15By Emily Kaiser 22 minutes ago
WASHINGTON (Reuters) - Sales at retail stores recorded their biggest monthly drop in more than three years in September while a measure of inflation eased, according to government data on Wednesday that intensified recession fears.
A gauge of manufacturing in New York State tumbled in October to the lowest since its inception in 2001, a report from the New York Federal Reserve Bank said.
Retail sales fell 1.2 percent last month to a seasonally adjusted $375.5 billion, the Commerce Department said. That was the sharpest drop since August 2005 and far worse than the 0.7 percent decline economists polled by Reuters had expected.
The Labor Department reported that U.S. wholesale prices dropped 0.4 percent in September, in line with expectations as another fall in energy costs eased price pressures.
With economic growth looking shaky and inflation cooling, investors bet on further interest rate reductions from the Federal Reserve on top of the 3.75 percentage points in cuts the central bank has already taken in the past 13 months.
U.S. stock index futures and the dollar extended losses after the steeper-than-expected drop in retail sales and weak New York factory data, while U.S. government debt prices added to gains on rate cut expectations.
"The question on everyone's minds is how deep of a recession," said Kathy Lien, director of currency research at GFT Forex in New York.
"Today's (retail sales) number indicates a very strong chance of negative GDP growth for the third quarter and would certainly pave the way for another 25 to 50 basis points of easing over the next few months and the PPI number confirms that as inflation is coming down as well."
While falling oil prices cooled overall inflation, a closely watched measure of prices that strips out food and energy costs posted a surprisingly steep increase. The so-called core PPI rose by 0.4 percent last month, twice the rate that economists expected.
The credit crisis that has raged for some 14 months has taken a heavy toll on consumer confidence and spending.
Excluding autos, retail sales were off 0.6 percent for September, double the 0.3 percent decline that economists had forecast. The house downturn continued to take a toll on furniture and home furnishings, with sales falling 2.3 percent, the sharpest decline since February 2003.
In the manufacturing sector, the New York Fed's "Empire State" index of general business conditions fell to minus 24.62 in October from minus 7.41 in September. Economists had been looking for a reading of minus 10.0.
(Additional reporting by Doug Palmer in Washington and Nick Olivari in New York)
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