Business in brief: Price of Kindle drops to $299
NEW YORK – Amazon.com Inc. cut the price of its Kindle electronic reading device to $299 on Wednesday in an effort to attract more bookworms and make the gadget a mainstream hit.
The new price is $60 below the tag the Kindle has had since May 2008. The product debuted at $399 in 2007.
Amazon spokeswoman Cinthia Portugal said the price cut is not just a short-term promotion.
“We’ve been able to increase the volume of Kindles we’re manufacturing and decrease the cost of doing so,” Portugal said.
Amazon has not disclosed Kindle sales figures, and the publishing industry has said e-books account for less than 1 percent of book sales. But it is a fast-growing, competitive segment. Customers can wirelessly download books to the Kindle, with new releases often as inexpensive as $10.
Consumers curb borrowing
WASHINGTON – Consumers trimmed borrowing in May for the fourth straight month as the recession took another bite out of investments and drove unemployment higher.
Many economists predict that consumers will stay cautious in the months ahead, boding for a lethargic recovery if the downturn ends later this year as many expect.
The Federal Reserve said Wednesday that consumer credit fell at an annual rate of 1.5 percent, or by $3.2 billion, from April. Economists expected a deeper cut of $9.5 billion.
But the new figures still mark the latest move by consumers to curb borrowing, pay down debt and strengthen household budgets. Americans have been spending less and saving more to cope with the recession, which started in December 2007 and is the longest since World War II.
IMF improves growth estimate
WASHINGTON – The global economy is beginning a sluggish recovery from its worst recession since World War II, the International Monetary Fund said Wednesday.
The IMF increased its estimate for global economic growth in 2010 to 2.5 percent, from an April projection of 1.9 percent. At the same time, it slightly downgraded its forecast for this year to a contraction of 1.4 percent, from 1.3 percent.
“The global economy is still in recession, but we’re inching towards the recovery,” said Olivier Blanchard, director of the IMF’s research department. “It’s much too early” to cut back on government and central bank efforts to stimulate growth, he said.
Even growth of 2.5 percent won’t be enough to keep global unemployment from growing next year, he added.