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Sluggish Growth: Deutsche Bank Lead Says Economic Growth Will Remain Slow Until Companies Increase Their Capital Output

The Eccles Building, which houses the U.S. Federal Reserve in Washington, D.C.

On this one issue economists appear to agree—the US’s economic growth has been sluggish at best.

One of the reasons economic improvement trails along at a begrudgingly slow pace is because businesses aren’t boosting capital spending to increase output. That's why the Federal Reserve is watching the market so closely, holding off on interest rate hikes until it’s clear the economy can take the added pressure, Bloomberg reports.

Deutsche Bank says companies' output is scarce at a time when the shortage in the labor market is becoming more expensive. Productivity—measured by the change in output per hour worked—averaged 0.7% in Q2, well down from its long-term average of 2.2%. [Bloomberg]