Economy - Wednesday

• Investor's Business Daily
• On 6:30 pm EST, Wednesday November 4, 2009

Gov't to hit debt limit in Dec.

The $12.1 tril debt ceiling will likely be reached 2 months later than initially estimated, the Treasury said. The gov't trimmed an emergency loan program as the financial crisis waned. Treasury wants Congress to pass legislation to raise the debt limit and prevent an unprecedented default on the nation's debt.

Europe service sector expands

Markit's final Eurozone Services index rose 1.7 points to 52.6 in Oct., the highest since Dec. '07, led by strength in France, Germany and Italy. It was the second consecutive month that the index exceeded 50, indicating expansion. The data were revised up from the previous reading of 52.3 and provide further evidence that the 16-member bloc has emerged from recession.

The Chartered Institute of Purchasing and Supply/Markit index of service sector activity rose 1.6 points to 56.9, the highest since Aug. '07 and the 6th straight month of expansion. G-20 to keep stimulus in place

G-20 policymakers this weekend are expected to maintain economic stimulus measures while trying to set up a system to prevent future crises. "We are not yet back to trend growth levels," a U.K. gov't source told Reuters, adding that the G-20 will likely decide that "current support measures need to be kept in place until recovery is well-secured." Yet policymakers will try to agree to joint efforts to remove stimulus once the global economy stabilizes, Deputy Treasury Sec'y Neal Wolin said.

Japan to keep rates near zero

The Bank of Japan will hold borrowing costs near zero to combat deflation and support a fragile recovery, BoJ Gov. Masaaki Shirakawa said. His comments soothed investors worried that the central bank might withdraw stimulus too quickly. The BoJ last week decided to end buys of corporate bonds and commercial paper that helped ease a credit crunch.

COMING UP THURSDAY

Initial jobless claims for the week of Oct. 31, 8:30 a.m. EST (forecast: 520,000). Q3 productivity growth, 8:30 a.m. EST (forecast: 6.5% annualized gain).

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