Weekly Economic Update: October 23 – October 27, 2017

October 23, 2017

CHART OF THE WEEK

Many Countries Eased Regulation But Not the United States

Every five years the Organization of Economic Cooperation and Development (OECD) publishes its Product Market Regulation index, which quantifies how much national policies promote or inhibit competition. As other countries have removed restrictions that reduce competition to enhance market function, the United States went from leader to laggard.

The competitive position of U.S. companies internationally will be a topic at JEC’s upcoming hearing with Kevin Hassett, Chairman of the President’s Council of Economic Advisers.

LAST WEEK

The Fed’s industrial production index covers nearly everything tangible produced in the United States. Capacity utilization measures how much firms actually produce relative to their maximum potential output.

Category	September	August	July
Industrial production (year-over-year percentage change)	1.55%	1.16%	1.84%
Capacity utilization (percent of capacity in active use)	76.0%	75.8%	76.5%

Noteworthy: From April 2015 to November 2016 the year-over-year growth rate of the industrial production index was negative. Since December 2016, it has avoided negative territory. The Fed reported that the effects from hurricanes Harvey, and to a lesser degree Irma, held down the growth in total production by 0.25 percentage point. Capacity utilization remains below its 1967-2007 average of 81.4%. The last time it exceeded 80% was March 2008.