America's Federal Reserve cut interest
rates by another quarter-point, to 3.75%. Wall Street, which had been{{U}}
(1) {{/U}}for a sixth half-point cut, was disappointed. The Dow fell
by 2%{{U}} (2) {{/U}}the week. The past week's economic statistics gave
mixed signals. Exports dropped by 2% in both March and April, largely{{U}}
(3) {{/U}}a decline in high-tech investment{{U}} (4) {{/U}};
the merchandise-trade{{U}} (5) {{/U}}widened to $458 billion in the 12
months{{U}} (6) {{/U}}April.{{U}} (7) {{/U}}, the Conference
Board's index of consumer confidence was higher than{{U}} (8) {{/U}}in
June. Concerns{{U}} (9) {{/U}}inflation in the euro
area{{U}} (10) {{/U}}. Preliminary data{{U}} (11) {{/U}}that
German consumer- price inflation fell to 3.1% in the year to June, from 3.5% in
May; wage growth{{U}} (12) {{/U}}to 1.4% in April, a real pay cut of
1.5%. Some economists fear that Germany is on the{{U}} (13) {{/U}}of
recession. The IFO index of business confidence dropped more{{U}} (14)
{{/U}}than expected in May, and the institute has cut its forecast of GDP{{U}}
(15) {{/U}}this year to only 1.2%, well{{U}} (16) {{/U}}the
German government's forecast of 2%. The euro area's
current-account deficit narrowed to $30 billion in the 12 months to April.
Britain's deficit in the first quarter was its smallest{{U}} (17)
{{/U}}1998,{{U}} (18) {{/U}}record investment income.
There was more bad news from Japan,{{U}} (19) {{/U}}retail sales
in large stores fell by 3.2% in May, the 37th consecutive monthly fall. The yen
fell{{U}} (20) {{/U}}the dollar, touching almost Yen 125 on one
point.