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BEIJING, Jan. 24 -- Microsoft Corp's US$32.6 billion special dividend payment last month raised personal income nationwide and probably worsened the US current account deficit in the fourth quarter, the Commerce Department said.
About US$24 billion of the payment will be recorded as personal dividend income in December, for an annual rate of US$288 billion, the department's Bureau of Economic Analysis said in a statement. That is enough to boost total US personal income by 2.9 per cent in the month, according to Bloomberg data.
The US$3-a-share, one-time payout by Microsoft, the world's third-biggest company by market value after General Electric Co and Exxon Mobil Corp, is the largest return of capital ever for a US company. Investors had demanded that the Redmond, Washington-based software maker return some of its cash.
"One-time events, such as the Microsoft dividend payout, can have a large effect on the quarterly and monthly estimates" because they are based on annual rates, the statement said. The bureau publishes annualized estimates so that different time periods can be more easily compared.
The statement was issued to answer questions about the dividend, said Ralph Stewart, a spokesman for the Bureau of Economic Analysis. Microsoft has no comment on the bureau's conclusions, said company spokesman Kent Hollenbeck.
The projected surge in personal income would be the biggest since a 3.4 per cent gain in December 1993, when many Americans took steps to increase earnings recorded that year ahead of tax increases slated to begin in 1994. Personal income fell by the same percentage the following month, as the one-time gains were not repeated, according to Bloomberg data.
The US current account balance will "become more negative" by the amount of Microsoft dividends distributed to overseas shareholders, the bureau said. The current account deficit, the broadest measure of trade, widened to a record US$164.7 billion in the third quarter.
December figures for personal income are scheduled for release from the Commerce Department on January 31. Fourth-quarter current-account figures will be released on March 16.
In addition, total corporate profits from current production will decrease by the amount of dividends distributed to non-residents, the bureau said.
(Source: China Daily, by Vivien Lou Chen) |
