Weekly Economic Update: October 30 – November 3, 2017
CHART OF THE WEEK
More U.S. Profit Stays Abroad as Foreign Tax Rates Fall
As international corporate tax rates have fallen (blue line) U.S. businesses have been reinvesting an increasing proportion of their income abroad (red line). Consequently, U.S. wage growth no longer tracks corporate profit growth because more of it is abroad, according to research by the Council of Economic Advisers. Lowering the U.S. corporate tax rate and moving to a territorial tax system should bring more profits back and raise U.S. wages. The dip in 2005 occurred due to a temporary tax holiday that allowed businesses to repatriate their profits to the United States at a lower tax rate.
LAST WEEK
News & Commentary Weekly Highlights
Wall Street Journal: U.S. Economy Notches Solid 3% Growth, Despite Hurricanes
InsideSources: Trump Adviser Looks Toward Better Economic Growth
Wall Street Journal: The Wages of Corporate Taxes
Economics21: Return to Due Process at EPA
JEC Releases
GDP Review (Third Quarter 2017)
Tiberi: Tax and Regulatory Reform Can Boost Wage Growth
JEC Hearing: The Economic Outlook with CEA Chairman Kevin Hassett
Top Economic Indicator Highlights
Gross Domestic Product (Third Quarter 2017—Advance Estimate)
Real GDP, change from previous quarter at seasonally adjusted annualized rate:
Q3-2017: 3.0% Q2-2017: 3.1% Q1-2017: 1.2% Q4-2016: 1.8%
Noteworthy: Despite the devastation caused by hurricanes Harvey and Irma, U.S. real GDP growth proceeded robustly for the third quarter of 2017.
THIS WEEK
Upcoming Economic Data
Monday
Personal Income/PCE Deflator (8:30am)
Dallas Fed Manufacturing Survey (10:30am)
Tuesday
Employment Cost Index (8:30am)
Chicago Purchasing Managers Index (9:45am)
Consumer Confidence Index (10:00am)
Wednesday
ADP National Employment Report (8:15am)
Construction (10:00am)
ISM Manufacturing (10:00am)
Motor Vehicle Sales (4:00pm)
Federal Reserve FOMC Meeting Statement (2:00pm)
Thursday
Productivity and Costs (8:30am)
Friday
Employment Situation (8:30am)
Trade Balance (8:30am)
ISM Non-Manufacturing (10:00am)
Manufacturers’ Shipments, Inventories, & Orders (10:00am)
