1 US growth accelerates (BBC) The US economy gathered speed in the second quarter of the year, growing at an annualised pace of 2.6%. The pick-up was helped by consumer spending in the quarter expanding at a pace of 2.8%, and businesses stepping up spending on equipment.
President Trump has pledged to pursue policies to boost the US economy, including cutting corporate and individual taxes, but has faced a Washington impasse. He has set an ambitious 3% growth target for 2017.
Consumer spending, which makes up more than two-thirds of the US economy, accelerated from the 1.9% growth figure from the first quarter. The resurgence in consumer spending accounted for most of the upturn in economic growth in the second quarter.
Stuart Hoffman, PNC senior economic adviser, said that “real consumer spending once again did the heavy lifting” in terms of economic growth. But with wage growth remaining sluggish there are concerns spending may slow in the next quarter.
2 Tesla delivers Model 3 (Khaleej Times) Tesla began delivering on a dream to make an electric car for the masses, rolling out the first of its keenly-awaited “Model 3” cars, aiming to disrupt a world accustomed to automobiles powered by pollution-spewing fossil fuel.
An initial batch of the ‘Model 3’ cars that rolled out of the Tesla plant in Fremont, California were given to customers, most of whom were employees of the company. Tesla founder and chief Elon Musk proclaimed it a great day for the company, saying the goal was to make a terrific electric car “that everyone can buy.”
Production of the electric car aimed at the broader market – with a starting price of $35,000 – will ramp up quickly, according to Musk, with 100 in August and 1,500 or more in September. Tesla aims to produce 5,000 units of the Model 3 a week this year, and 10,000 units a week in 2018.
Tesla already sells “S” and “X” model electric cars, but with a starting price of $80,000 they have been seen as wheels for the wealthy. The Model 3 silhouette resembles that of the Model S, but the new electric ride is smaller with a simpler design.
The vehicle’s battery was designed to keep it going for “at least 215 miles” (345 kilometers) before needing to be recharged, according to Tesla. More than a half-million customers have placed deposits to get on the waiting list for the Model 3, and anyone wanting one will have to wait at least until 2018.
3 Jack Ma’s promise of a million jobs (Benjamin Haas in The Guardian/The Observer) Chinese billionaire Jack Ma has once again set his sights on the US. In a high-profile meeting with Donald Trump before the inauguration, Ma promised to create 1m jobs in the US, and has wasted no time ingratiating himself into Trump’s inner circle.
He has dined alone with Ivanka Trump, and last week commerce secretary Wilbur Ross sat next to Ma at a meeting of US and Chinese businessmen. Those political connections may benefit him as he seeks to acquire American companies in a country that is increasingly wary of big Chinese investment.
“As a merchant, it’s about knowing your customer, and Trump doesn’t care about anything that’s not huge,” says Duncan Clark, a longtime friend and author of Alibaba: The House That Jack Ma Built. “He figured a million is a good number to get Trump’s attention. “Realistically, without a major acquisition, I fail to see how that’s possible,” he adds. “In the US context, it’s a very big number.”
For years, Ma has been pushing his vision of US small businesses selling to Chinese shoppers through his online marketplaces. He is often called the “Jeff Bezos of China”, and there are clear similarities. Both built e-commerce empires and, like Bezos and the Washington Post, Ma even owns an old established newspaper, in his case Hong Kong’s South China Morning Post.
But there’s a key difference: while Bezos’s Amazon sells products to consumers, maintaining massive warehouses and operating a sophisticated logistics network, Alibaba’s sites are simply a medium, connecting consumers with merchants who ship through independent couriers. This has led experts to say Alibaba’s business model is closer to Google’s than Amazon’s.
“It’s an incredibly unlikely target for job creation in any plausible time frame,” said Christopher Balding, a professor of business and economics at Peking University’s HSBC business school. “If we’re talking 25 or 40 years, maybe Alibaba could create that many jobs.”
By comparison, WalMart, the largest private employer in the US, employs 1.5 million people. If Ma is able to deliver on his promise of 1m jobs, it would decrease the number of unemployed workers by a staggering 14%.