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U.S. is closing in on debt limit, Lew warns

July 30th, 2015  // News

Economic uncertainty underscores a need to raise the U.S. debt limit, Treasury Secretary Jack Lew says in a letter to Congress. The government can probably meet financial obligations until Oct. 30 by continuing "extraordinary measures" implemented in March, Lew says. Read more

Global imbalances limit world growth, IMF says

July 29th, 2015  // News

Limited domestic demand in countries with large current-account surpluses such as Germany and China is an obstacle to global economic growth, according to the International Monetary Fund. The major forces driving global imbalances are China's current-account surplus and the U.S. deficit. Read more

Upcoming GDP figure expected to be key for Fed

July 28th, 2015  // News

Preliminary figures on second-quarter growth in the U.S. are due Thursday and likely to be the decisive indicator of the economy's direction and a powerful influence on the Federal Reserve's rate plans, according to a Bank of America Merrill Lynch analysis. The economy is expected to have grown 2.7% in Q2, and adjusted measurements may yield a higher estimation of Q1 growth. Read more

Fed staff displays less optimism than official Fed forecast

July 27th, 2015  // News

Staff reports for the Federal Reserve that were mistakenly posted online last month revealed a somewhat darker assessment of the economy than that expressed by Fed officials. Among other things, the report projected gross domestic product growth dropping well below 2% by 2020, contrary to the Fed's official forecast of sustained growth in the range of 2% to 2.3%. Read more

U.S. initial unemployment claims lowest in 42 years

July 24th, 2015  // News

The number of Americans seeking jobless benefits for the first time hit its lowest level in 42 years last week, the Labor Department said. Initial claims dropped by 26,000, to 255,000. The four-week rolling average fell by 4,000, to 282,500. Read more

Social Security disability fund will be out of reserves next year

July 23rd, 2015  // News

The Social Security disability fund's reserves will run dry next year, potentially leading to a 19% cut in benefits, according to a report from trustees. Congress could use Social Security's retirement fund to cover the shortfall, as has been done in the past. If combined, reserves in the disability and retirement funds could last until 2034. Read more

Companies brace for possible overtime expansion

July 22nd, 2015  // News

Companies are preparing for a Labor Department proposal that would greatly expand the number of workers who are eligible for overtime pay. Business leaders are considering a range of responses, from installing software that will alert them when an employee is about to earn overtime to discouraging staffers from checking email after the workday is over. Read more

Fed requires major banks to hold more capital

July 21st, 2015  // News

The eight biggest banks in the U.S. have to hold significantly more capital to protect themselves from collapse under rules finalized by the Federal Reserve. "This final rule will confront these firms with a choice: They must either hold substantially more capital, reducing the likelihood that they will fail, or else they must shrink their systemic footprint, reducing the harm that their failure would do to our financial system," said Janet Yellen, head of the central bank. Read more

Moving pension obligations to insurers is risky, IMF says

July 20th, 2015  // News

The practice of shifting pension obligations to insurers might increase risk within the U.S. financial system, the International Monetary Fund says in a report. Interconnectedness of the system increases when pension risk is transferred to the insurance industry through products such as longevity swaps, the report says. Read more

U.S. jobs, housing data reinforce rate rise scenario

July 17th, 2015  // News

Expectations of an interest-rate increase in the U.S. this year rose as jobs and housing data confirmed recent strength in those sectors. Initial claims for jobless benefits last week fell below expectations, and this month's National Association of Home Builders/Wells Fargo Housing Market Index is at its highest point since 2005. However, a separate index of manufacturing activity added a sour note with evidence of continuing weakness. Read more

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