CHART OF THE WEEK

 

 

Each year since 2007, the Congressional Budget Office (CBO) lowered its projection of the maximum sustainable inflation-adjusted output the economy can produce—the economy’s real potential GDP.  Projections of real potential GDP are based on economic fundamentals that do not change much from year to year, so what caused CBO to lower them?

 

The likely explanation is that Obama Administration policies limited how much the economy is able to produce.  We now face a constrained potential for 2017 that is $2 trillion lower than what CBO had projected ten years ago.  Pro-growth policies like reforming our outdated tax code and easing regulatory burdens could lift the constraints and revive America’s potential to grow.

 

LAST WEEK

News & Commentary Weekly Highlights

• Washington Examiner: Let's make America grow again
• Wall Street Journal: Yellen Gives Conservatives Something to Cheer
• Investor’s Business Daily: Thank You, Obama: U.S. Steadily Lost Ground On Economic Freedom Over Past 8 Years
• Bloomberg: China's Holdings of Treasuries Dropped in 2016 by Most on Record

 

Top Economic Indicator Highlights

• Consumer Price Index (January)
  • Core CPI (excludes food and energy): January: 2.3%, December: 2.2%, November: 2.1%
  • Overall CPI: January: 2.5%, December: 2.1%, November: 1.7%
  • Above numbers are percentage change from the previous year’s corresponding month
  • Noteworthy: The overall CPI registered the largest gain since March 2012.  Although the Federal Reserve uses a broader measure of inflation (the core personal consumption expenditures price index) to determine its goal of maintaining 2% average inflation, the CPI data, which is highly correlated, suggest that more Fed rate hikes are on the horizon.

 

JEC Releases

• ICYMI: Tiberi Op-Ed in Washington Examiner: Let's Make America Grow Again (Monday)
• Love Is In the Air… and the Economy (Tuesday)

 

THIS WEEK

Upcoming Economic Data and Events

• Monday
  • No Releases
• Tuesday
  • Philly Fed Non-Manufacturing Survey (8:30am)
• Wednesday
  • Consumer Credit Panel (11:00am)
  • Existing Home Sales (10:00am)
• Thursday
  • Chicago Fed National Activity Index (8:30am)
• Friday
  • Michigan Consumer Sentiment (Final) (10:00am)
  • New Residential Sales (10:00am)