Page 24 - ATD05October2015

A24

BUSINESSMonday 5 October 2015

Root of investor anxiety: Uncertainty about China and Fed

PAUL WISEMAN 10 percent since July 20, In this July 15, 2015 file photo, a woman walks past a banner reading “Prosperity” in English and
KEN SWEET even though both rose Chinese on a street in central Beijing.
AP Business Writers sharply on Wednesday.
Fears about China’s slow- The July-to-September Associated Press
down and a coming U.S. quarter was the S&P’s worst
interest rate hike have sent since 2011. fears. The concern is that subject of the day. What is percent in August from a
global stock markets into a “Concerns about China’s happening there, and how year earlier. Investors are
fidgety freefall. economy are heightening Chinese policymakers consequential is it for the nervously awaiting a report
But why? China’s economy the level of angst among rest of us? There are a lot of Thursday on Chinese man-
has been slowing for years. global investors who are al- have panicked and that unknowns.” ufacturers.
And the Federal Reserve ready having to cope with Any economic news out of Fed Chair Janet Yellen not-
has long been expected multiple sources of uncer- the economy might be in China is being scrutinized ed, in part, concerns about
to raise short-term interest tainty,” says Eswar Prasad, by anxious investors. Glob- China’s economy in ex-
rates from near zero, where professor of global trade worse shape than previ- al stocks tumbled Monday plaining the central bank’s
it’s kept them since 2008. policy at Cornell University. after China reported that Sept. 17 decision to delay
So what’s sowing panic As it undergoes a painful ously thought. profits at industrial com- its long-awaited first rate
now? shift away from an overreli- panies had plunged 8.8 hike in nine years.q
In a word: Uncertainty. ance on exports and over- “If China’s scared, sud-
Investors have grown used investment in homes and
to near-zero rates and a factories, China’s econ- denly the rest of the world
booming Chinese econo- omy has decelerated for
my — the world’s second- four straight years. And it’s is scared as well,” says Eric
largest after the United almost surely slowing again
States. No one knows how in 2015. Lascelles, chief economist
the global economy will The International Monetary
manage without them. Fund forecasts that China’s for RBC Global Asset Man-
Many investors aren’t wait- economy will expand 6.8
ing to find out. They’ve percent this year. It would agement. “China is the
been dumping stocks with be its weakest growth since
a vengeance. When inves- 1990. Many economists,
tors feel unsure about the skeptical of China’s offi-
future, many tend to panic. cial numbers, suggest that
The iShares MSCI Emerging growth might even dip be-
Markets index has lost near- low 6 percent.
ly 16 percent of its value Beijing’s clumsy attempts
since mid-July. In the Unit- to halt a drop in its own
ed States, the Dow Jones stock market and its con-
industrial average and the fusing Aug. 11 decision
Standard & Poor’s 500 in- to devalue its currency,
dex have both sunk about the yuan, have escalated

Study shows employers shifting more medical costs to workers

TOM MURPHY This 2009 photo provided by the Kaiser Family Foundation shows insurance,” obscured in forced many businesses to
AP Business Writer CEO Drew Altman. recent years by the health scale back their cover-
Employers are leaving a care overhaul’s cover- age. One of the quickest
bigger chunk of the bill for Associated Press age expansion for people ways they have to control
care to workers who use who don’t have coverage the growth in premiums, or
their health insurance, and years. 10 percent in 2006. Kaiser’s through work. cost of coverage, without
benefits experts see few “That has an impact on study didn’t measure fam- “It’s funny, we used to think significantly changing the
signs of this trend slowing. family budgets,” Kaiser ily coverage deductibles, of $1,000 as a very high de- insurance is to raise an em-
Most companies now of- CEO Drew Altman said. which can be more com- ductible, and now it’s al- ployee’s deductible.
fer health coverage that The study also found that plex, but researchers say most commonplace,” he Altman said the increase in
requires employees to pay 46 percent of workers with they those have grown as said. deductibles has helped re-
an annual deductible be- single coverage have a well. strain premium growth for
fore insurance kicks in, and deductible of $1,000 or Altman calls this cost shift a “Consumers have much the past several years. In
the size of that deductible more. That’s up from only “quiet revolution in health more skin in the game, and 2015, premiums rose an av-
has soared in the past de- that may be fine if you’re erage of 4 percent for sin-
cade, according to a sur- healthier and don’t use gle and family coverage.
vey released Tuesday by a lot of health care. That The employer generally
the Kaiser Family Founda- could be a real problem if pays most of the premium
tion and Health Research you’re chronically ill.” and has the remaining
& Educational Trust. Employer-sponsored health share taken out of the em-
The average general de- insurance is the most com- ployee’s pay check before
ductible for workers with mon form of coverage taxes.
single coverage totaled in the United States, with Kaiser’s research found
$1,077 this year, compared about 147 million people that the size of a health
to only $303 in 2006. enrolled. plan’s deductible can de-
Companies of all sizes of- pend on the employer.
That deductible has fer coverage as a way to Small firms had an average
climbed nearly seven times keep workers and make of $1,836, while big busi-
faster than wages, on av- sure they stay healthy. But nesses had $1,105.q
erage, over the past five years of rising costs have