Morning Report: China Signals Possible Rate Hike; GM's Bold Prediction

China's central bank unexpectedly raised a key interbank market interest rate Thursday for the first time in nearly five months, a move that could lay the groundwork for an eventual rate hike.

The People's Bank of China offered 60 billion yuan ($8.8 billion) of bills at a yield of 1.3684 percent, four basis points higher than at last week's sale, according to a statement.

The tightening move came less than a day after the People's Bank of China hinted its priorities had shifted toward managing inflation expectations and away from single-mindedly supporting economic growth.

The prospect of a tougher policy stance from Beijing sent Chinese shares tumbling and hit a range of commodities, with oil slipping below $83 a barrel on concerns about demand from China.

In the U.S., the number of people claiming unemployment benefits was essentially flat last week, after two weeks of sharp drops, a sign that jobs are still hard to come by even as layoffs slow.

The Labor Department says initial claims for jobless benefits rose by 1,000 to a seasonally adjusted 434,000 last week. That's lower than the 447,000 a consensus of analysts expected.

The number of continuing claims dropped 179,000 to 4.8 million. The figure doesn't include an additional 5.4 million people receiving unemployment under federal emergency programs, as of the week ending Dec. 19, the latest data available.

The Labor Department will issue a more comprehensive snapshot of the job market on Friday, when it releases the monthly jobs report for December.

And what a difference a year makes. In a wide-ranging interview with journalists, General Motors Co. interim chief executive, Edward Whitacre Jr., said he expects the government-owned automaker to be profitable in 2010 and that the company could have a public stock offering before the end of the year.

"My prediction is we will be" profitable in 2010, Whitacre said. "Do we have obstacles in the way? Yes. But we have a good management team and a good plan in place."



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