U.S. Productivity Rises by Most in Three Years as Output Jumps
Worker productivity in the U.S. rose in the third quarter by the most since 2014 as the world’s largest economy expanded at a solid pace, a Labor Department report showed Thursday in Washington. The results are consistent with third-quarter figures last week that showed gross domestic product posted the strongest back-to- back quarters of growth since 2014. While the recent pickup in productivity is encouraging, a sustained acceleration has remained a challenge during this expansion, holding back the pace of economic growth. One reason: businesses have been cautious in investing in efficiency- boosting technology. That’s starting to change, as recent data show corporate spending on equipment picking up this year.
BOE Raises Interest Rate for First Time in More Than Decade
Bank of England policy makers raised interest rates for the first time in a decade, yet expressed concern for Britain’s Brexit-dented economy by indicating that another increase isn’t imminent. Led by Governor Mark Carney, the Monetary Policy Committee voted 7-2 on Thursday to increase the benchmark rate to 0.5 percent from 0.25 percent. The minutes of their meeting underscored worries that the economy is fragile as the 2019 split with the European Union nears. Crucially, policy makers omitted language from previous statements saying that more hikes could be needed than financial markets expect. That implies that officials are comfortable with pricing for two more quarter-point increases, roughly one by late next year and another in 2020.
North China cuts non-peak household power prices to help fuel switch
Northern Chinese provinces are cutting power prices to homes during non-peak periods of usage by industry this winter to help support the nation’s plans to switch to electricity and gas-powered heating from coal-fired heating systems. It follows calls by the central government for different prices for peak and low-use hours in winter to reduce the cost of using electric heating equipment in homes. China has been striving to cut the burning of coal and increase the use clean fuel to improve air quality. This winter, it aims to replace coal-fueled household heating with gas or electricity in millions of residences. One obstacle in the way of the switch is the higher cost of electric heating equipment relative to coal-fired heating. The National Development and Reform Commission (NDRC), China’s top economic planner, in September called on local authorities to make electricity more price-competitive with coal.
People’s Bank of China seen supporting yuan around Trump visit
China is leaving nothing to chance during next week’s visit by U.S. President Donald Trump, and will likely fortify the value of the yuan – a regular target of attack during last year’s campaign for the White House. Trump promised while campaigning that if elected he would name China a “currency manipulator” for artificially depressing the value of the yuan to make its exports more competitive.Since he took office, though, the Treasury Department has twice declined to do so because China has not met the necessary criteria. Beijing has allowed the yuan CNY=CFXS to rise more than 5 percent against the U.S. dollar so far this year, after it plunged around 6.5 percent in 2016, thanks to tighter management of capital outflows and broad weakness in the greenback.