US Fed keeps interest rates on hold; Galaxy helps Samsung profit jump 14%; Shopping may turn possible on social media

1 US Fed keeps interest rates on hold (BBC) The US Federal Reserve has kept interest rates between 0.25% and 0.5%, the rate it has held since December. The Fed said while conditions have improved, the central bank is still waiting for inflation to reach 2%.

In its statement the Fed said it would “carefully monitor actual and expected progress toward its inflation goal” as it weighed when next to raise rates. In its statement accompanying today’s decision, the Fed’s Open Market Committee pointed to strengthening in the labour market and improved household spending, as positive signs.

The unemployment rate fell below 5% in January. The central bank appeared to be less focused on global financial risks to the US economy. A slowing economy in China and falling oil prices have weighed on the Fed’s past decisions, but appeared to be less important this time around.

The Fed said low oil prices and poor exports early in the year had contributed to weak inflation. Additionally, while the housing sector has continued to strengthen, the Fed said business investment and exports remained “soft”. Most economists only expect two rate increases in 2016. The bank’s next chance to raise rates will be when it meets in June.

2 Galaxy helps Samsung profit jump 14% (The Guardian) Samsung Electronics, the world’s largest smartphone maker, has recorded better than expected first quarter profits thanks to the successful early release of its new flagship Galaxy handset.

The result will encourage shareholders after a disappointing 2015 that saw Samsung lose more than $8bn in market value, with its smartphone business sandwiched by top-end rivals like Apple’s iPhone and lower-end devices from fast-growing Chinese outfits like Huawei and Xiaomi.

In an effort to defend its smartphone share, Samsung rolled out the latest version of its Galaxy S7 smartphone in March – a month earlier than the previous year and ahead of new launches by its competitors. Net income for the January-March period stood at 5.25 trillion won ($4.56 billion), up 14.1% from 4.63 trillion won in the same quarter last year.

The strong Galaxy S7 performance came in the face of a flattening global smartphone market that saw arch-rival Apple on Tuesday report its first-ever drop in iPhone sales since launching the iconic handset. Apple reported net income of $10.5bn in the fiscal quarter to March 26, down from $13.6bn last year.

3 Shopping may turn possible on social media (San Francisco Chronicle) It’s now possible — though neither easy nor particularly convenient — to buy stuff on Facebook via automated messaging “bots.” But it’s far from clear that people really want to go shopping on the social network.

Last month, Facebook announced that people can use its Messenger chat service to order flowers, keep up with the news and buy shoes or other goods from participating companies. Only a few have signed on so far, but if the feature takes off, we could all be chatting with artificially intelligent bots to reserve plane tickets, book hotel rooms or order salmon teriyaki before long.

Of course, there are still a lot of ifs around these shopbots, starting with the fact that Facebook has been trying, and largely failing, to launch its own e-commerce efforts for years. Facebook also offers the “buy” button, which appears in its ads and aims to let people purchase stuff without leaving the social network. But it’s unclear how many people actually use it.

For all Facebook’s success at changing the way people interact with one another and expanding their willingness to share personal details in public, it has “struggled with figuring out how to layer on e-commerce,” says eMarketer analyst Debra Aho Williamson.

The company isn’t exactly hurting in the meantime. It reported earnings of $1.51 billion, almost triple what it pulled in a year earlier. Its revenue jumped 52 percent to $5.38 billion, exceeding analyst expectations of $5.26 billion. Its shares rose 9 percent in after-hours trading.

But can shopbots turn Facebook into a mall? If so, it may still take a while, analysts say. Artificial intelligence has made big strides recently, but bots are still in no position to replace thinking humans, says Joshua March, CEO of Conversocial, a customer-service software company. Using a bot for general, complicated customer service with existing technology will only lead to frustrated customers.

Of course, bots will get better over time, and consumers will also get used to them, particularly if companies are careful to make clear when people are chatting with bots and not actual humans. “My general thesis is never betting against technology,” March says.


About joesnewspicks

This blog captures interesting news items from around the world for those strained by information overload and yet need to stay updated on global events of significance. The news items displayed are not in order of merit. (The blog takes a weekly off — normally on Sundays — and does not appear when I am on vacation or busy.) I am a journalist for nearly three decades.
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