Weekly Economic Snapshot 8/13 - 8/17

Economic Facts for This Week

• Bureau of Labor Statistics’ measure of core inflation (CPI excluding food and energy) rose 2.4 percent in July from the previous year, the highest reading in nearly a decade.
• Medicaid expansion leads to lower health insurance premiums on the marketplace: Counties in Medicaid expansion states have 11 percent lower premiums, on average, than bordering counties in non-expansion states.
• Nearly 80 percent of U.S. counties with the highest rates of food insecurity are rural. Republican attempts to undermine SNAP would disproportionately hurt these counties.
• Cutting capital gains taxes (or indexing them to inflation) would do more harm than good for the economy, according to a nonpartisan expert from the Tax Policy Center.

Tracking Trump’s $4k Promise

During the tax cut debate, the White House claimed that the average American household would see an income increase of $4,000 a year because of the tax cuts. Below are some indicators looking at whether or not Republicans are living up to their promise:

• Stock buybacks are at record highs, with public companies announcing more than $750 billion in stock buybacks so far this year. Goldman Sachs projects buybacks could soar to $1 trillion by the end of 2018.
• Average weekly wages for production and nonsupervisory workers are just 2 percent higher than they were before the new tax law, before adjusting for inflation.

Chart of the Week

 

The average hourly wage for production and nonsupervisory workers—our best measure of the median workers’ take home pay—was lower in July 2018 than it was in July 2017, after adjusting for inflation. This is the third straight month of year-to-year declines in real wages. Seven months since the Republican tax law took effect, it’s not clear how much longer American workers are supposed to wait before they see the raises President Trump promised them.

ICYMI

• New research shows that the Earned Income Tax Credit increases children’s high school and college completion rates and employment outcomes.
• Venture capital continues to be highly concentrated in a small subset of metro areas—including San Francisco, New York, and Boston—according to new research from the Center for American Entrepreneurship.
• A new report from the Center for American Progress has the estimated impact of Republican sabotage of the health care marketplaces for each congressional district.
• Between 1970 and 2010, the black-white gap in men’s median annual earnings grew as large as it was in 1950, a new study shows.

Coming This Week

• Wednesday 8:30am: Productivity and Costs (for Q2): https://www.bls.gov/news.release/prod2.toc.htm

• Wednesday 9:15am: Industrial Production (for August): https://www.federalreserve.gov/releases/g17/default.htm

• Thursday 8:30am: Housing Starts: https://www.census.gov/construction/nrc/schedule.html