LAST WEEK

News & Commentary Weekly Highlights:

• MarketWatch: Treasury yields log largest weekly decline in 2 months (Friday)
• Wall Street Journal: Fed Stands Pat, but Says Case for Rate Increase Has Strengthened (Thursday)
• Cato: The Unsung Economic Success Story of New Zealand (Wednesday)
• Foundation for Economic Education: Europe will regret chasing all the innovative American companies away (Wednesday)
• Wall Street Journal: The Reasons Behind the Obama Non-Recovery (Tuesday)

Top Economic Indicator Highlights:

• Atlanta Fed Business Inflation Expectations Survey
  • This survey measures how much businesses expect prices to rise over the next year.
  • August: 1.9%, July: 1.8%, June: 1.7%
  • Noteworthy: In addition to measuring inflation sentiments, the survey also asks businesses to provide expectations about economic conditions.  Notably, more than half of firms are indicating that current sales are less than in “normal” times.  This number has been trending downward since early 2015. 

JEC Releases:

• September 2016 Federal Open Market Committee Announcement Review (Thursday)
• August State Employment Data (Tuesday) 

THIS WEEK

Upcoming Economic Reports & Releases:

Major Indicators

• New Residential Sales (10:00am, Mon)
• Dallas Fed Manufacturing Survey (10:30am, Mon)
• Revised Building Permits (8:00am, Tue)
• Consumer Confidence Index (10:00am, Tue)
• Richmond Fed Manufacturing Survey (10:00am, Tue)
• Dallas Fed Texas Retail Outlook Survey (10:30am, Tue)
• Advance Durable Goods (8:30am, Wed)
• Dallas Fed Energy Survey (10:30am, Wed)
• Advance Economic Indicators (8:30am, Thu)
• Gross Domestic Product (Final Estimate for Q2 2016) (8:30am, Thu)
• Jobless Claims (8:30am, Thu)
• Pending Home Sales (10:00am, Thu)
• Personal Income/PCE Deflator (8:30am, Fri)
• Chicago Purchasing Managers Index (9:45am, Fri)
• Michigan Consumer Sentiment (Final) (10:00am, Fri)
• Michigan Inflation Expectations (Final) (10:00am, Fri)

JEC Hearing

• The ‘New Normal’? An Assessment of the Economic Recovery (Wednesday)

Chart of the Week:

As the 2009 Obama stimulus package was winding down, Republicans took control of the House of Representatives and called for deficit-reduction.  At the time, Keynesian economists, such as Paul Krugman, warned a depression would be imminent if the deficit were reduced, i.e. “austerity.”

The blue line shows the deficit-to-GDP ratio.  A falling blue line indicates a shrinking deficit relative to the size of the economy.  Following a substantial deficit reduction after the Republican takeover of the House, the economy did not collapse into depression, as the red line (real GDP growth) shows.

Nevertheless, we still have a long way to go to reach fiscal stability and robust economic growth.  To ensure that we get there, Senator Coats introduced legislation to reform mandatory spending programs and achieve a balanced budget.  In order to boost economic growth, he recently reminded big government advocates that, “We need to reduce burdensome regulations and streamline our tax code to untie the hands of job creators and help us reach our economic potential.”