Hours Cut, Productivity Rises
Productivity rose more than expected in the first quarter as U.S. companies reduced the number of hours their employees worked. The 2.6 percent annual rate of increase in productivity, which measures how much workers produce for every hour of work, followed a 2.1 percent increase in the previous quarter, the Labor Department said. Labor costs rose at a 2.2 percent annual rate after a 1.3 percent fourth-quarter gain.</br></br>SBC Communications was denied permission by U.S. regulators to exempt new high-speed Internet and video services from rules that apply to voice and other Web products sold by phone companies. The Federal Communications Commission voted 4-0 to reject the petition from SBC, the second-largest U.S. phone company, according to the FCC's Web site. The FCC said it denied the request because the rules "may not even apply" and the petition wasn't specific enough. SBC, which plans to deliver the new video and faster-speed Internet services over a $4 billion fiber-optic network, could get a favorable government ruling later. FCC Chairman Kevin J. Martin has said he wants to remove old restrictions from the newer services.</br></br>The Congressional Budget Office lowered its 2005 federal deficit forecast by 12.5 percent, following the lead of Wall Street forecasters. Taxes paid before the April 15 deadline exceeded expectations by $54 billion, and the CBO now estimates that the deficit for the current fiscal year will be about $350 billion. Private-sector analysts estimate that the deficit will be about $370 billion.</br></br>Reviving the 30-year Treasury bond would be unlikely to raise long-term bond yields because of low inflation, Federal Reserve Chairman Alan Greenspan said. "It is clearly a phenomenon which not only exists in the U.S. but pretty much around the world: that is low, real long-term interest rates," Greenspan said. "What we are observing is an underlying set of pressures which is a major factor causing disinflationary forces worldwide in the past decade." The Treasury will decide in August whether to reintroduce the 30-year bond.</br></br>General Motors spun off the part of its pension fund that invests in venture capital and buyout funds. GM retains 49 percent of the new firm, Performance Capital Management, which manages about $7 billion. General Motors Asset Management of New York is the world's biggest corporate pension fund.