US sharply upgrades 2nd quarter growth to 1.

4%
WASHINGTON, Sept. 29 (AFP)
The US economy grew faster than originally thought in the second quarter of this year, with
Commerce Department figures released Thursday showing a 1.4 percent annual rate.
The Commerce Department's previous second-quarter GDP estimate had been a gloomier
1.1 percent. Thursday's figures however surpassed an analyst consensus, which had called for a
revision to 1.3 percent.
Job markets also showed signs of continued strength as the US Labor Department reported
Thursday that unemployment claims remained low in the week ending September 24, coming
in at 254,000.
In releasing the new numbers, which are derived from a fuller set of data than that used in
prior estimates, the Commerce Department said the general picture of US growth in the quarter
remained the same.
Jim O'Sullivan, chief US economist at High Frequency Economics, said the second quarter
revisions were fairly minor and that the growth in the quarter still looked weak. "The available
data are signalling a pickup" in the third quarter, he said in a client note.
The most notable change between the second and third estimates was that businesses' fixed
investments increased instead of decreasing, as they had in July's estimate, the department said
in a statement.
Personal consumption and exports also helped drive the results in the second quarter, it
said. These gains were partly offset by drops in state and local government spending as well as
spending on homes.
Along with the health of labor markets this year, the pace of economic growth has been a
key factor in monetary policymakers' deliberations on setting interest rates, which are at
historically low levels after having been raised for the first time in a decade in December.
Taken together with an anemic 1.1 percent growth rate in the first quarter, initial estimates
for the second quarter had helped paint a downcast portrait of the first half of 2016, stoking
nervousness about the health of the US economy.
The International Monetary Fund has said it plans to downgrade its 2016 forecast for the
US in light of the poor first half.
However, in congressional testimony on Wednesday, US Federal Reserve Chair Janet
Yellen said most Fed policymakers were confident in the economy and agreed that a rate hike
would be appropriate before the end of 2016.
In raising rates to 0.25-0.5 percent at the end of 2015, the Fed had announced the beginning
of the end of the monetary policies designed in the immediate aftermath of the Great Recession
of 2008-2009.

US Fed orders Chinese bank to tighten laundering controls

WASHINGTON, Sept. 29 (AFP)
The US Federal Reserve said Thursday that it had ordered the Agricultural Bank of China,
one of China's largest banks, to strengthen its internal controls against money laundering.
The move came after a former staffer sued the bank last year, saying said she had been
mistreated and forced her from her job after she had informed the Fed that the bank was possibly
in violation of rules on policing money laundering.
The staffer, Natasha Taft, settled her complaint with the bank in earlier this month without
any public finding of guilt.
But the Fed followed that up Thursday with an agreement that the bank will overhaul its
internal controls to ensure that transactions
The bank and the Fed entered the agreement "solely for the purpose of settling this matter
without a formal proceeding being filed and without the necessity for protracted or extended
hearings or testimony," according to the agreement.
The agreement gave the bank 60 days to complete a review and tell the Fed how it would
improve oversight and monitoring of transactions to prevent money laundering.

Mexico's central bank raises key rate as peso falls

MEXICO CITY, Sept. 29 (AFP)
Mexico's central bank raised its key interest rate on Thursday, citing inflationary pressure, the
peso's record drop and the risk of financial volatility linked to the US presidential election.
The Banco de Mexico hiked the overnight interbanking rate by half a percentage point to
4.75 percent.
"With this action, we seek to counter inflationary pressure and maintain expectations on
inflation well-anchored," the bank said in a statement.
The national currency fell to the psychological level of 20 pesos per dollar this month.
Analysts partly attribute the drop to concerns about Republican presidential candidate
Donald Trump's potential victory in the US November 8 election, which could hurt Mexico due
to his demand that the country pay for a massive wall across the border.
The bank's statement cited the risk of more volatility in international financial markets
"especially if nervousness about the possible consequences of the electoral process in the United
States worsens."