Weekly Economic Snapshot 6/18 - 6/22
Economic Facts for This Week
- The Republican tax law is leading to less demand for municipal bonds, which will raise the cost of borrowing for state and local governments. This could exacerbate the infrastructure crisis that the country is already facing.
- New research reveals that 40 percent of multinational corporate profits are shifted to tax havens. Since these “paper profits” are not invested in productive activities overseas, it isn’t surprising that the GOP tax break on overseas profits is resulting in dividends, stock buybacks, and one-time bonuses instead of real investment in the U.S.
- Recent research from the SEC shows that executives sell five times as much stock in the days immediately after a share buyback announcement as they do in the days immediately before the announcement, suggesting that executives are using share buybacks as an opportunity to cash out their shares.
- In addition to harming the environment and the economy, the Trump administration’s Environmental Protection Agency (EPA) agenda will harm Americans’ health. New research from Harvard professor David Cutler estimates that, if fully enacted, their attacks on EPA regulations will result in an additional 80,000 deaths and 1 million cases of respiratory issues per decade.
Chart of the Week
American workers continue to wait for the raises they were promised as part of the Republican tax law. The average hourly wage for production and nonsupervisory workers was lower in May 2018 than it was in May 2017, after adjusting for inflation. Wage growth for most workers remains weak and now that inflation is starting to pick up, wages are barely keeping pace with the growing cost of living. This comes on top of decades of stagnating wages for most workers.
ICYMI
- Former CEA Chair Jason Furman and former CEA economist Rob Seamans evaluate the impact artificial intelligence will have on the economy, concluding that it will raise productivity growth but could disrupt labor markets.
- While the House Republican version would strip benefits from families, the bipartisan Senate farm bill would strengthen SNAP, according to a new CBPP report.
- Research from The Century Foundation shows that well-designed outcomes-based funding models for community colleges can improve equity and efficiency.
Coming This Week
- Tuesday 8:30am: New Residential Construction (for May) https://www.census.gov/construction/nrc/index.html
- Wednesday 10:00am: Existing Home Sales (for May) https://www.nar.realtor/research-and-statistics/housing-statistics/existing-home-sales
- Thursday 2:30pm: JEC hearing on digital trade
