Weekly Economic Snapshot 2/20 - 2/24

Economic Facts for this Week at Home

• Repealing the ACA would increase the number of uninsured by 18 million people in the first year, and 32 million by 2026, according to CBO estimates. Premiums for individual plans would increase by 20-25 percent above current projections in the first year and would be roughly double the premiums currently projected for 2026.
• Over 11 million Medicare beneficiaries have received cumulative savings on prescription drugs averaging more than $2,100 thanks to the ACA.
• The average premium for people with employer-based family coverage was nearly $3,600 lower in 2016 than if premium growth followed the pre-ACA trend. The ACA also saves people with employer-based family coverage an additional $800 in out-of-pocket costs.

Chart of the Week: Inflation Still Below Target

 

• Although inflation has begun to pick up, overall its current level suggests that the economy still has room to grow. The Consumer Price Index (CPI) rose by 2.5 percent on an annual basis in January, but the Federal Reserve’s preferred measure of inflation, the Personal Consumption Expenditures index (PCE) remains below the Federal Reserve’s current target of 2 percent annual inflation. Many commentators feel that current levels of inflation, along with other economic indicators, suggest that the Federal Reserve should maintain current interest rate levels.
• The recent rise in prices is driven primarily by oil and gas prices, as seen in the relatively flat “core” price indices, which exclude more volatile food and energy prices.

ICYMI

• Medicaid expansion decreased the probability of divorce by 5.6 percent among those aged 50 to 64, likely because it reduced medical divorce.
• America’s social safety net provides benefits to Americans across racial and ethnic backgrounds. Whites without a college degree are the largest group of working-age adults lifted out of poverty by the safety net: 6.2 million in 2014 relative to 2.8 million blacks and 2.4 million Hispanics. The percentage lifted out of poverty is similar for whites and blacks (44 and 43 percent respectively), whereas only 28 percent of working-age Hispanics without a college degree are lifted out of poverty by the safety net.
• Fiscal austerity in Europe led to a loss of 3 percent of GDP and hampered post-crisis growth. Less severe austerity likely contributed to the faster rebound of the U.S. economy; the U.S. has been responsible for more than 55 percent of the net employment growth since 2010 in the G-7, even though we account for only about 40 percent of total employment.
• Americans in the bottom 50 percent of the income distribution saw cumulative real income growth of only 1 percent and those in the middle 40 percent saw growth of only 42 percent, from 1980 to 2014 according to new data. In contrast, individuals in the top 1 percent saw growth of 205 percent and those in the top 0.001 percent saw growth of 636 percent.