The World Bank downgrades its global growth forecast, AIG's CEO steps down, and Amazon bricks up 'The Lego Movie." Read about these and more of the day's top business news stories.
World Bank Downgrades Global Growth Forecast
In an outlook released late Tuesday, the World Bank said it said it expects the world economy to grow faster - 2.8 percent this year and 3.5 percent in 2016. But its new forecast is weaker than the 3.2 percent expansion it had predicted in January, The Associated Press reports. The downgrade is being attributed to the disappointing growth rates in developing economies, the severe and prolonged winter in the United States and the crisis in Ukraine. In January, the World Bank had anticipated growth of 5.3 percent in developing economies. It has downgraded that forecast to 4.8 percent.
AIG CEO Stepping Down
American International Group CEO Robert Benmosche, is resigning, The Associated Press reports. Beginning September 1, Benmosche, who commanded the insurer through its recovery from the financial crisis, will serve as an advisor to new CEO Peter Hancock, the company’s executive vice president and CEO of AIG Property Casualty. Benmosche, 69, has been CEO and president of AIG since Aug. 10, 2009. He is credited for winding down many of the complex financial structures that got AIG into trouble and streamlining the company. AIG shares have risen 92 percent under his leadership, roughly in line with the 94 percent gain of the Standard & Poor’s 500 during the same period, the AP says.
Google Buying Skybox Imaging
Google announced Tuesday it is buying five year-old startup Skybox Imaging for $500 million. The satellite company will allow Google to improve the quality and immediacy of the satellite imagery used in its digital maps. Google Inc., owner of the world’s most popular search engine and email service, plans to use Skybox's satellite already in orbit to supplement the material that it licenses from more than 1,000 sources, including other satellite companies such as DigitalGlobe and Astrium, according to The Associated Press. Google hopes to build more satellites that could be used to beam Internet access to points around the world. The expansion into satellites comes two months after Google bought drone maker Titan Aerospace for an undisclosed amount. The deal needs approval from the National Oceanic and Atmospheric Administration, as well as the Federal Communications Commission.
RadioShack Sales Slip for Ninth Straight Quarter
Consumer electronics retailer RadioShack announced Tuesday its first-quarter loss widened to $98.3 million as sales slipped for the ninth straight quarter. Weak sales of phones, aggressive competition and an industry-wide decline in consumer electronics sales contributed to the loss, the company said. Sales at stores open at least a year, a key gauge of a retailer's health fell 14 percent. RadioShack plans to close up to 200 stores a year over the next three years. The retailer launched a nationwide Fix It Here program for phones and tablets with cracked screens, broken buttons, faulty cameras, water damage, audio issues and other maladies, that it hopes will lure customers into the stores. Same-day repair service will be available in select markets. RadioShack operates 4,300 stores in the USA, 274 in Mexico and about 950 dealer outlets worldwide.
North Dakota’s Economy Doubled in 11 Years
North Dakota’s economic output has more than doubled in just over a decade, according to Bureau of Economic Analysis data on gross domestic products released Wednesday, CNN reports. In 2002, the state had the country’s second smallest economy behind Vermont. As of last year, it has become the fifth smallest, surpassing Wyoming, Montana and South Dakota. Only Alaska ranks higher for the highest level of GDP per capita, generating about $69,000 in economic activity per resident. North Dakota’s oil boom has fueled the state’s surging economic growth. Between 1998 and 2013, the state has added 132,000 jobs, a 41 percent increase. More than half of these were added within the past three years, CNN states, with every industry from restaurants to gas stations hiring.
Amazon Bricks up ‘The Lego Movie’
Everything is not awesome for fans of “The Lego Movie” hoping to preorder the eagerly-anticipated June 17 Warner Bros. DVD release. Amazon lists the title as “currently unavailable” and is offering no preorder option. “The Lego Movie” is just one of the Warner Bros. films unavailable for preorder while contract negotiations continue between the studio and Amazon. The situation mirrors the contentious public dispute between Amazon and Hachette, a major publisher, over terms for e-book sales.