WASHINGTON (Reuters) – The number of Americans filing for new jobless benefits fell to a near four-year low last week and factory activity in the Mid-Atlantic area grew in February, more evidence of sustained momentum in the economy.

The economic outlook was brightened further by other data on Thursday showing builders breaking more ground on new residential projects in January, pointing to signs of life in the distressed housing market.

The reports added to a raft of solid data that now has analysts expecting only a mild slowdown in growth in the first quarter. Economists also have dialed down their expectations for another round of bond-buying or quantitative easing by the Federal Reserve.

“The numbers add to the belief that the economy is shifting gears. There is just no number that is giving us a whole lot of trouble, except for consumer spending,” said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania.

Initial claims for state unemployment benefits dropped 13,000 to a seasonally adjusted 348,000, the lowest level since March 2008, the Labor Department said.

Economists polled by Reuters had forecast claims rising to 365,000. The four-week average of new claims, seen as a better measure of labor market trends, fell 1,750 to 365,250 – the lowest since April 2008.

In a separate report, the Philadelphia Federal Reserve Bank said its business activity index rose to 10.2 this month from 7.3 in January as orders and shipments jumped. Though factories in the region hired fewer workers this month, they increased hours for existing employees, which bodes well for wage growth.

“Everything is stronger than expected. Barring any unforeseen problems from Europe it appears we’re in a self-sustaining cycle of growth. We’re better than where we were but not as good as we’d hope,” said Jim Awad, managing director at Zephyr Management in New York.

The run of fairly solid data was extended, with the Commerce Department reporting that housing starts rose 1.5 percent to an annual rate of 699,000 units last month, beating economists’ expectations for a 675,000-unit pace.

Starts were boosted by multi-unit buildings, reflecting growing demand for rental apartments as Americans move away from homeownership. Permits for future home construction rose 0.7 percent to a 676,000-unit pace in January.

U.S. stocks rose and prices for U.S. Treasury debt fell on the data, while the dollar rallied against the yen.

FIRMER DATA

The data on employment, manufacturing and retail sales also have raised doubts on whether the U.S. central bank will keep its pledge to hold interest rates at ultra low levels until at least through 2014. The Fed made its low rate commitment before January’s employment report was released.

Minutes of the Fed’s January 24-25 meeting released on Wednesday showed a few policymakers believed a third round of quantitative easing would be needed this year to support the U.S. economy.

Last week’s drop in new unemployment claims pushed them below the 350,000 level that economists normally associate with sustained strength in the labor market. Claims have declined for three straight weeks.

Job gains have exceeded 200,000 for two straight months and the unemployment rate dropped to a three-year low of 8.3 percent in January.

But considerable slack still remains, with 23.8 million Americans either out of work or underemployed. There are no job openings for nearly three out of every four unemployed.

The number of people still receiving benefits under regular state programs after an initial week of aid tumbled to its lowest level since August 2008.

In a second report, the Labor Department said prices received by farms, factories and refineries edged up just 0.1 percent in January as food and energy costs fell. Wholesale prices dipped 0.1 percent in December.

But producer prices excluding food and energy rose 0.4 percent last month, the largest gain since July, after increasing 0.3 percent in December.

“While I am bullish on the economy I don’t see growth getting away from us enough to the point where it becomes inflationary any time soon,” said David Coard, head of fixed income sales and trading at the Williams Capital Group in New York.

Wholesale prices outside of food and energy were pushed up by drugs costs, which accounted for about 40 percent of the increase. Higher prices for light motor trucks and household appliances also contributed.

(Additional reporting by Jason Lange; Editing by Andrea Ricci)

WASHINGTON (Reuters) – Producer prices outside food and energy recorded their largest increase in six months in January, but are unlikely to ignite inflation pressures given the slack in the labor market.

The Labor Department said on Thursday its seasonally adjusted core producer price index rose 0.4 percent last month, the largest gain since July, after increasing 0.3 percent in December.

Economists polled by Reuters had expected core PPI to rise only 0.2 percent. In the 12 months to January, core producer prices rose 3.0 after increasing 2.7 percent in December.

But overall prices received by farms, factories and refineries edged up 0.1 percent after dipping 0.1 percent in December.

The rise, which was smaller economists’ expectations for a 0.4 percent gain, reflected declines in food and energy prices.

In the 12 months to January, producer prices increased 4.1 percent, moderating from 4.8 percent December. That was the smallest increase in a year.

The Federal Reserve last month viewed inflation as largely contained and said it expected to hold interest rates near zero at least through late 2014.

But a surprisingly strong run of economic data – from job growth to manufacturing – is raising questions about whether the U.S. central bank can hold off on tightening monetary policy that long.

Wholesale prices outside of food and energy were pushed up by a drugs costs, which accounted for about 40 percent of the increase. Higher prices for light motor trucks and household appliances also contributed.

Passenger car prices fell 0.8 percent after rising 0.5 percent in December.

(Reporting by Lucia Mutikani; Editing by Neil Stempleman)

WASHINGTON (Reuters) – New claims for unemployment benefits unexpectedly fell last week to a near four-year low, a government report showed on Thursday, suggesting the labor market was finally strengthening.

Initial claims for state unemployment benefits dropped 13,000 to a seasonally adjusted 348,000, the Labor Department said, the lowest since March 2008. The prior week’s figure was revised up to 361,000 from the previously reported 358,000.

Economists polled by Reuters had forecast claims rising to 365,000. The four-week moving average for new claims, seen as a better measure of labor market trends, fell 1,750 to 365,250 – the lowest since April 2008.

Last week’s drop pushed claims below the 350,000 level that economists normally associate with sustained strength in the labor market. New jobless claims have declined for three straight weeks.

Job gains have exceeded 200,000 for two straight months and the unemployment rate dropped to a three-year low of 8.3 percent in January.

But considerable slack still remains, with 23.8 million Americans either out of work or underemployed. There are no job openings for nearly three out of every four unemployed.

A Labor Department official said there was nothing unusual in the state-level data and no state had been estimated.

The number of people still receiving benefits under regular state programs after an initial week of aid tumbled 100,000 to 3.43 million in the week ended February 4. That was the lowest level since August 2008.

Economists had forecast so-called continuing claims falling to 3.50 million from a previously reported 3.52 million.

The number of Americans on emergency unemployment benefits rose 16,568 to 3.00 million in the week ended January 28, the latest week for which data is available.

A total of 7.68 million people were claiming unemployment benefits during that period under all programs, up 18,304 from the prior week.

(Reporting By Lucia Mutikani; Editing by Neil Stempleman)

WASHINGTON (Reuters) – World Bank President Robert Zoellick said on Wednesday he will step down in June and Washington pledged to put a replacement candidate forward within weeks for a job that has always gone to an American.

The Obama administration said it would open the process to competition, marking the first time it has shown willingness to loosen its grip on the world’s top development lender.

Zoellick took the reins at the Bank in 2007 after a staff revolt pushed out Paul Wolfowitz, and he moved quickly to return the institution’s focus to alleviating poverty.

Developing countries have for years pressed for a greater voice in leading global financial institutions and are likely to stress the importance of a competitive process, but the United States is still widely expected to retain its hold on the job.

“It is very important that we continue to have strong, effective leadership of this important institution, and in the coming weeks, we plan to put forward a candidate with experience and requisite qualities to take this institution forward,” U.S. Treasury Secretary Timothy Geithner said in a statement.

While Geithner called for an “open and expeditious process,” analysts say Washington can ill afford to give up the post without risking the U.S. Congress cutting funding for the Bank.

UNDECIDED ON FUTURE

In an interview with Reuters, Zoellick said his decision to leave on June 30 at the end of his five-year term was his own and was not due to pressure from the Obama administration.

The former U.S. chief trade negotiator and deputy secretary of state dismissed speculation he would join a Republican presidential campaign as “not true,” saying only that he would decide what to do next once he leaves the World Bank.

“It really was my own decision,” Zoellick said. “My personal sense is it’s time to move on and I think once you feel that way you shouldn’t stay.”

Zoellick, who discussed the selection process with the board in a two-hour meeting on Wednesday, said the first step was for the board to call for nominations. “An open process is important,” he said.

Speculation has been rife over who might take the job when Zoellick departs. Possible U.S. candidates include Secretary of State Hillary Clinton and former White House economic adviser Lawrence Summers, but the State Department said Clinton would not be taking the job. “She has said this is not happening,” spokeswoman Victoria Nuland said.

Emerging market and developing countries have campaigned hard in recent years to break Europe’s grip on the top position at the International Monetary Fund and the United States’ hold on the presidency of the World Bank.

Officials from large emerging economies like Brazil said on Wednesday the selection process for Zoellick’s successor should be based on qualifications and not nationality. However, they acknowledged that given U.S. congressional pressure the job will probably remain in the hands of an American.

Last year, emerging market economies made an aggressive push to fill the IMF top job in a bitter contest won by France’s Christine Lagarde.

On Capitol Hill, lawmakers said the World Bank job should stay in U.S. hands.

“I think it ought to be (an American) given the balance between that and the IMF and the interests that we have right now,” said Senate Foreign Relations Committee Chairman John Kerry, a Democrat from Massachusetts.

Senator Richard Lugar of Indiana, the committee’s top Republican, echoed that sentiment: “Ideally I would like to see an American replace him … That would be my preference.”

Nancy Birdsall, who heads the Center for Global Development in Washington, said that while the United States was committed to an open process on paper, domestic politics necessitated a American successor.

“The election year timing puts the White House in an especially unenviable position. There is a risk that the World Bank could become a highly partisan, U.S. hot-button issue, as the UN has too often been,” she wrote in a recent blog.

STEADY AT THE HELM

When Zoellick took the job in July 2007, he turned the attention of the Bank to a brewing food and energy price crisis that was stoking social unrest in the poorest parts of the world.

As the bank looked for ways to help, the global financial crisis of 2008 threatened to undermine more than a decade of strong growth in emerging and developing countries.

Under Zoellick, World Bank lending increased sharply to $44 billion in fiscal 2010 from $13.5 billion in 2008, reflecting the increased development needs of fast-rising countries in Asia, Africa, Latin America and the Middle East.

Zoellick also won approval for an $86.2 billion increase in the Bank’s general resources. It was the first increase in more than 20 years. He championed more voting power for emerging economies and convinced China, Brazil and others to contribute more funding.

Despite budget strains in the developed world, Zoellick lobbied for and secured more than $90 billion in pledges to replenish a separate World Bank fund for the poorest countries.

In an effort to modernize the World Bank, he has given a greater voice to emerging economies. He has also championed the need for better governance in regions such as the Middle East, where street protests toppled dictators in Tunisia, Egypt and Libya.

(Additional reporting by Glenn Somerville, Susan Cornwell and Laura MacInnis; editing by Kenneth Barry)

WASHINGTON (Reuters) – World Bank President Robert Zoellick said on Wednesday he will step down in June, raising questions as to whether the United States will for the first time throw open the job it has always claimed as its own.

“I’m honored to have led such a world class institution with so many talented and exceptional people,” Zoellick said in a statement announcing his plans. Earlier, he had met with the World Bank’s 25-member board to inform them of his decision.

Speculation has been rife in recent months over who might take the job when Zoellick departs. Possible U.S. candidates include Secretary of State Hillary Clinton and former White House economic adviser Larry Summers.

Zoellick, a Republican, would potentially be a strong candidate for a senior position if a Republican takes the White House in presidential elections in November.

While the Obama administration has said it supports an open and transparent selection process to fill lead positions in global institutions, it is unlikely to forfeit the top job at the World Bank in an election year, development experts said.

Emerging market and developing countries have campaigned hard in recent years to break Europe’s grip on the International Monetary Fund and the United States’s hold on the World Bank top positions.

Officials from large emerging economies like Brazil said on Wednesday the selection process for Zoellick’s successor should be based on qualifications and not nationality. However, they acknowledged that given U.S. congressional pressure the job will probably remain in the hands of an American.

Last year, emerging market economies made an aggressive push to fill the IMF top job in a bitter contest won by France’s Christine Lagarde.

“I do not know whether the president has spoken with Mr Zoellick and I don’t have any information for you regarding possible successors,” White House press secretary Jay Carney told reporters travelling with President Barack Obama on Air Force One.

“Asked specifically about Hillary Clinton or Larry Summers as possible candidates, Carney said, “There is a lot of speculation in the press about this and other jobs…I am not going to confirm any of it.”

Nancy Birsdall, who heads the Center for Global Development in Washington, said on paper the United States is committed to opening up the selection process to all, but political pressure from U.S. congressional leaders will keep the job in U.S. hands.

“The election year timing puts the White House in an especially unenviable position. There is a risk that the World Bank could become a highly partisan, U.S. hot-button issue, as the UN has too often been,” Birdsall wrote in a recent blog.

Development groups said it was time to open the job to other countries.

“The way the World Bank picks its president needs to change,” said Elizabeth Stuart, policy adviser for Oxfam, the global development group. “The Bank only operates in developing countries, so any candidate not supported by a majority of these countries would plainly lack legitimacy.”

STEADY AT THE HELM

Zoellick, a former U.S. chief trade negotiator and Deputy Secretary of State, became World Bank president in July 2007 amid a staff revolt against then president Paul Wolfowitz after revelations he had a role in giving his companion, a bank employee, a raise.

He immediately turned the bank’s attention on its development agenda, warning of a brewing food and energy price crisis, which was stirring social unrest in the poorest parts of the world.

As the bank looked for ways to help countries cushion the impact of skyrocketing food prices, a global financial crisis threatened to undermine more than a decade of strong growth in emerging and developing countries.

Under Zoellick, World Bank lending increased sharply to $44 billion in fiscal year 2010 from $13.5 billion in 2008, reflecting increased needs by fast-rising emerging and developing countries in Asia, Africa, Latin America and the Middle East.

Zoellick also secured approval for an $86.2 billion capital package, the first in over 20 years. He championed more voting power for emerging economies and convincing countries as China, Brazil and others to contribute more funding to the World Bank.

Despite budget strains in developed world, Zoellick secured over $90 billion in pledges during tough negotiations to replenish the World Bank’s fund for the poorest countries.

In speeches he has pointed to the rise of emerging economies as new poles of growth, outlined the need for a new approach to aid, while emphasizing the need for better governance in regions such as the Middle East where street protests that toppled dictators in Tunisia, Egypt and Libya.

(Additional reporting by Glenn Somerville and Laura MacInnis; editing by James Dalgleish and Jeffrey Benkoe)

WASHINGTON (Reuters) – Retail sales picked up last month after a sluggish December, providing a firm foundation for the economy’s recovery.

Sales rose 0.4 percent in January after being flat the prior month, the Commerce Department said on Tuesday.

The January reading was weaker than economists had expected because auto dealers took in less cash. Excluding autos, sales rebounded a solid 0.7 percent, the biggest gain in 10 months.

“The consumer is spending and there is certainly no sign of a recessionary downturn, but spending patterns reflect a deleveraging consumer weighted by weak growth and a higher cost of living,” said Steve Blitz, chief economist at ITG Investment Research in New York.

So-called “core” retail sales, which go into the calculation of U.S. gross domestic product, rose 0.7 percent after declining 0.4 percent in December. Core sales strip out autos, gasoline and building materials.

Investors on Wall Street took a dim view of the report and the Standard & Poor’s 500 index retreated from a near seven-month high. Prices for U.S. Treasury debt rose and the dollar rose against a basket of currencies.

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Graphic on retail sales – http://link.reuters.com/guc66s

Graphic on import prices – http://link.reuters.com/muc66s

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GASOLINE PRICES RISING

While the economy is expected to take a step-back in the first half of the year, a firming labor market and solid manufacturing are seen providing a cushion.

Automakers reported the strongest sales in nearly 2-1/2 years in January, but that was supported by discounts and strong fleet sales. The government, which measures retail sales in dollars, counts fleet sales as a business capital expenditure, not retail activity.

Other data on Tuesday showed confidence among small U.S. business owners rose for a fifth straight month in January.

But economists are worried that a recent increase in gasoline prices, which contributed to the gain in retail sales last month, could hurt spending in the months ahead.

“The rise in gasoline prices will likely take a toll on spending in coming months unless income growth improves,” said Mark Vitner, a senior economist at Wells Fargo Securities in Charlotte, North Carolina.

Still, the retail sales report adds to a recent run of fairly upbeat economic data, which some analysts say reduce the need for the Federal Reserve to ease monetary policy further through a third round of bond purchases.

A Reuters survey of economists published on Tuesday showed a 35 percent chance of more Fed bond purchases. It also found that economists see a 50-50 chance that the central bank could raise interest rates before the end of 2014. The Fed said last month it expected to keep rates low until then.

But with unemployment still at an uncomfortably high 8.3 percent, the Fed is still actively debating its next step.

San Francisco Federal Reserve Bank President John Williams said on Monday it was vital to “keep the monetary policy throttle wide open.”

His counterpart at the Philadelphia Federal Reserve Bank, Charles Plosser, took an opposing view, decrying the “accelerationist approach to monetary policy.”

“I’m not anxious to step on the brake, but I’m not anxious to cut a hole in the floorboard so I can go faster either,” he told reporters.

The rise in spending at gasoline stations in last month was the biggest since March of last year. The government revised downward its estimates of retail sales for both November and December.

(Additional reporting by Lucia Mutikani in Washington and Ryan Vlastelica and Gertrude Chavez-Dreyfuss in New York; Editing by Andrea Ricci and Dan Grebler)

WASHINGTON (Reuters) – President Barack Obama said on Tuesday he had seen “hopeful signs” that Congress would pass a payroll tax cut extension for the full year, as he kept pressure on lawmakers to take action he said was needed to keep the U.S. recovery on track.

“When a plane has finally lifted off the ground, you don’t ease up on the throttle,” Obama said at an event intended to showcase how urgently ordinary Americans need the $40 per paycheck that the payroll tax cut is worth.

Republican leaders in the U.S. House of Representatives dropped their demand on Monday that the tax break be paid for by cuts elsewhere in federal spending, paving a way for a deal with Obama’s Democrats.

“The good news is, over the last couple of days we’ve seen some hopeful signs in Congress that they realize that they’ve got to get this done, and you’re starting to hear voices talk about how can we go ahead make this happen,” Obama said.

He cautioned that “you can’t take anything for granted in Washington until my signature is actually on it,” and urged the public to keep up the political pressure to cushion the U.S. recovery from the likely shock of higher gas prices.

“When gas prices are on the rise again, because as the economy strengthens, global demand for oil increases, and if we start seeing significant increases in gas prices, losing that $40 could not come at a worse time,” Obama said.

Seeking a repeat of the public backlash that helped push Republicans to agree to a temporary extension of the tax break, which expires on February 29, Obama said keep the stories coming.

“Tell us what $40 means to you. If you tweet it, use the hash tag #$40. Call, tweet, write your congressman, write your senators, tell them do not let up until this thing gets done.”

(Reporting By Alister Bull and Caren Bohan; editing by Christopher Wilson)

WASHINGTON (Reuters) – Business inventories rose 0.4 percent in December, reinforcing the view that fourth-quarter economic growth received a big boost from companies restocking their shelves.

The Commerce Department said on Tuesday that inventories climbed to $1.56 trillion in December.

Economists polled by Reuters had forecast inventories increasing 0.5 percent in December. Sales rose 0.3 percent in November, the government said.

Inventories are a key element for measuring changes in gross domestic product.

A report on January 27 showed growth in business inventories helped drive a 2.8 percent expansion in gross domestic product during the fourth quarter.

Tuesday’s report showed manufacturing stocks rose 0.1 percent in December, while retailers gained 0.2 percent and wholesalers’ stocks edged 1.0 percent higher.

Business sales advanced 0.7 percent to $1.23 trillion.

The inventory-to-sales ratio, which measures how long it would take to clear shelves at the current sales pace, fell to 1.26 months from 1.27 months in November. (Reporting by Jason Lange; Editing by Andrea Ricci)

WASHINGTON (Reuters) – Retail sales rose less than expected in January as consumers cut back on car purchases, but a rebound in an underlying sales gauge suggested a solid underpinning for the economy’s recovery.

Total retail sales increased 0.4 percent last month, the Commerce Department said on Tuesday. Economists polled by Reuters had forecast a 0.7 percent increase.

Core retail sales, which exclude autos, gasoline and building materials, climbed 0.7 percent in January.

“I don’t think there’s anything here that really brings into question the fact that the economy has been improving,” said Wayne Kaufman, chief market analyst at John Thomas Financial in New York.

Even so, U.S. stock futures added to losses following the data’s release, while Treasury debt prices extended small gains and the euro extended losses against the dollar.

Fears of a sharp slowdown in the U.S. economy have faded in recent weeks on signs that the job market is picking up and manufacturing is accelerating. Confidence among small U.S. business owners hit a four year-high in January, the National Federation of Independent Business said on Tuesday.

With the economy strengthening, there is a good chance the Federal Reserve will raise interest rates before the end of 2014, according to a Reuters poll. The Fed has said it expects to hold rates low through the end of that year.

Still, with the unemployment rate at 8.3 percent in January, a significant minority of economists still expect a further easing of monetary policy in coming months.

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Graphic on U.S. retail sales: http://link.reuters.com/guc66s

Graphic on U.S. import/export prices: http://link.reuters.com/muc66s

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In the retail sales report, spending at gasoline stations rose 1.4 percent – the biggest gain since March 2011 – while receipts for electronics increased 0.5 percent.

Dampening the overall increase, sales of cars and autoparts dropped 1.1 percent, while shopping at nonstore retailers, a category dominated by online sales, also fell 1.1 percent.

But the increase in core sales, which correspond most closely with the consumer spending component of the government’s gross domestic product report, suggested consumers were not growing more timid.

“The headline number was a little weaker than expected but the core figure was better so net-net it was not entirely a negative report,” said Boris Schlossberg, director of currency research at GFT in Jersey City, New Jersey.

The government revised downward it estimates for retail sales in both December and November, suggesting consumers did not spend as much as previously thought during the holiday shopping season.

The economy still faces threats from a potential worsening of Europe’s debt crisis or the possibility or fiscal tightening at home, although comments by Republican lawmakers on Monday suggested a deal was within reach to extend a payroll tax cut.

An expiration of that tax cut – scheduled for the end of this month – would likely slow economic growth. Extended unemployment benefits are also due to expire at the end of February.

The economy could also take a hit if higher gasoline prices crimp consumer spending on other things.

A separate report from the Labor Department showed U.S. import prices rose a touch more than expected in January as petroleum and food prices rebounded strongly.

(Additional reporting by Lucia Mutikani in Washington and Ryan Vlastelica and Gertrude Chavez-Dreyfuss in New York; Editing by Andrea Ricci)

WASHINGTON/BRUSSELS (Reuters) – U.S. and European regulators approved Google Inc’s $12.5 billion purchase of Motorola Mobility and said they would keep a sharp eye on the web search giant to ensure patents critical to the telecom industry would be licensed at fair prices.

It was one of a series of approvals on Monday that underscored the scramble by technology companies to acquire big pools of patents.

The U.S. Justice Department also approved an Apple Inc-led consortium’s purchase of a trove of patents from bankrupt Canadian company Nortel Networks, and signed off on Apple’s purchase of patents formerly owned by Novell Inc.

Google, whose Android software is the top operating system for Internet-enabled smart phones, said in August that it would buy phone-maker Motorola for its 17,000 patents and 7,500 patent applications, as it looks to compete with rivals such as Apple and defend itself and Android phone manufacturers in patent litigation.

Antitrust enforcers on both sides of the Atlantic want to prevent companies from gouging rivals when they license patents essential to ensuring different firms’ communications devices work together.

“This merger decision should not and will not mean that we are not concerned by the possibility that, once Google is the owner of this portfolio, Google can abuse these patents, linking some patents with its Android devices. This is our worry,” EU Competition Commissioner Joaquin Almunia told reporters in Brussels.

The U.S. Justice Department said it was reassured by Apple’s and Microsoft’s public statements that they would not seek injunctions in filing infringement lawsuits based on the Nortel patents.

“Google’s commitments have been less clear,” the Justice Department added in a statement. “The division determined that the acquisition of the patents by Google did not substantially lessen competition, but how Google may exercise its patents in the future remains a significant concern.”

Almunia said the EU might be obliged to open some cases in the future. “This is not enough to block the merger but we will be vigilant,” he said.

Regulators in China, Taiwan and Israel have still not signed off on the Google purchase of Motorola.

Regulators in China have until March 20 to decide whether to approve the deal or start a third phase of review, according to a source close to the situation.

The purchase would give Google one of the mobile phone industry’s largest patent libraries, as well as hardware manufacturing operations that will allow Google to develop its own line of smart phones.

Google, the newest major entrant to the mobile market, is already being sued for patent infringement by Oracle Corp, which is seeking up to $6 billion.

The legal battles over patents between various technology and smartphone firms has prompted the European Commission to open an investigation into legal tactics used by Samsung Electronics against Apple and whether these breach EU antitrust rules.

Google’s move to buy Motorola Mobility came shortly after it tried and failed to buy Nortel’s patents. The winner was an Apple-led consortium, which includes Research in Motion Ltd, Microsoft Corp, EMC Corp, Ericsson and Sony Corp, which agreed in July to pay $4.5 billion for 6,000 patents and patent applications.

Google, which runs world’s No. 1 Internet search engine, has been under increasing regulatory scrutiny. The U.S. Federal Trade Commission and the European Union are both investigating Google following accusations it uses its clout in the search market to beat rivals as it moves into related businesses.

(Reporting By Diane Bartz and Foo Yun Chee; Editing by Tim Dobbyn)