Honeywell International, Inc. said it would cut 6,500 jobs after announcing its earnings dropped 18 percent in the first three months of 2000. In Europe, Philips Electronics, the continent's largest electronics manufacturer, announced plans to cut 6,000 to 7,000 jobs or about 3 percent of its workforce, after announcing a 91 percent drop in first quarter earnings. Concerned about the slowing U.S. economy, the Federal Reserve April 18 reduced its interest rate on overnight loans between banks to 4.5 percent from 5 percent. It was the fourth half-point cut in rates by the central bank since the beginning of the year. Meanwhile, consumer confidence fell to its lowest level in eight years, according to a preliminary survey released by the University of Michigan in mid-April.
Consumer spending accounts for two-thirds of the nation's gross domestic product.
Business spending on software and equipment fell for the first time in almost 10 years. The business news service also estimated that growth in the first quarter of 2001 probably slowed to a 0.7 percent rate. This would place growth over the past two quarters at the slowest rate since the 0.1 percent pace in the first half of 1991. The economic slowdown in the United States will have an even bigger impact on semicolonial countries. The Journal reports that exports from Asian and Pacific countries will grow just 5 percent this year, after jumping 23 percent in 2000.