Productivity rate in first quarter beat expectations
WASHINGTON — Worker productivity increased at a faster pace in the first three months of this year than previously estimated, wage pressures moderated and an important measure of business activity showed the service sector skirted recession in May.
The Labor Department reported yesterday that productivity rose at an annual rate of 2.6 percent from January through March, faster than the government's first estimate of 2.2 percent a month ago.
The Institute for Supply Management said its nonmanufacturing index, which covers 80 percent of the economy, stood at 51.7 in May — better than expected and close to April's 52 figure.
S. KOREA TO FINE INTEL $25.4 MILLION
SEOUL, South Korea — South Korea's antitrust regulator said today it will order Intel Corp. to pay $25.4 million for violating fair trade rules.
The Korean Fair Trade Commission said in a statement today that it was issuing the order because the semiconductor giant offered rebates to South Korean computer companies and undercut competitor Advanced Micro Devices Inc.
Intel, based in Santa Clara, Calif., immediately criticized the ruling and said it would consider its options, including a possible appeal.
OIL DROPS TO $122 BUT GAS STILL HIGH
NEW YORK — Oil prices extended their drop from record highs yesterday, falling to the $122 level after the Energy Department said gasoline demand fell sharply last week.
Retail gas prices, meanwhile, rose to a record above $3.98 a gallon and are likely to hit $4 in coming days, although oil prices have retreated nearly $13 from last month's record levels.
In its weekly inventory report, the department's Energy Information Administration said demand for gasoline fell by 1.4 percent over the past four weeks. Meanwhile, gasoline inventories rose by 2.9 million barrels last week, more than three times the increase analysts polled by energy research firm Platts had expected.
J.M. SMUCKER WILL BUY FOLGERS
CLEVELAND — Jams and jellies maker J.M. Smucker is buying coffee provider Folgers from consumer products company Procter & Gamble in a $2.95 billion, all-stock deal, Smucker's biggest ever.
The deal announced yesterday will nearly double Smucker's size.
Folgers will become the 10th No. 1-ranked brand in the Smucker stable that includes its namesake jams, Eagle Brand condensed milk, Hungry Jack pancake mix and two earlier acquisitions from P&G, Jif peanut butter and Crisco cooking oil.
The company said it expects annual sales increases of 6 percent over the long term with acquisitions continuing to play an important role.
ACTORS UNION SIGNS NEW DEAL
LOS ANGELES — A person with the Screen Actors Guild said yesterday the union has signed contracts to allow actors to work on more than 300 independently produced films in the event of an actors strike, adding pressure to the major studios to reach a deal.
The person, who was not authorized to speak publicly and requested anonymity, said the wide range of films contained a slew of A-list talent, including Mel Gibson in "Edge of Darkness," Nicolas Cage in "Bad Lieutenant," and Oliver Stone's "W."
The disclosure may put fire to the feet of big studios such as Paramount Pictures and Warner Bros. by demonstrating that the Hollywood movie machine can roll on without them even if an actors strike occurs after June 30, when the current contract expires.
SAG's completion guarantees were offered only to independent movie producers with no current financing nor distribution deals with the major Hollywood studios.