Weekly Economic Update 4/16: CBO Raises Job Growth Projection by 2.6 Million

April 16, 2018

CHART OF THE WEEK

CBO Raises Job Growth Projection by 2.6 Million

The Congressional Budget Office (CBO) now projects 156.8 million jobs in America by year-end 2027—2.6 million more jobs than in its June 2017 Budget and Economic Outlook. CBO attributes an average of 1.1 million additional jobs over the next 10 years to the recently enacted Tax Cuts and Jobs Act.

LAST WEEK

JEC Hearing

Unleashing America’s Economic Potential (Hearing video)

JEC Releases

Countdown to Tax Day #1: Higher Wages, More U.S. Jobs & Investment
Countdown to Tax Day #2: Fairer Taxes
Countdown to Tax Day #3: More Family Friendly
Countdown to Tax Day #4: A Simple, Super-sized Standard Deduction
Countdown to Tax Day #5: Lower Tax Rates Will Make Tax Day Less Taxing Next Year

News & Commentary Weekly Highlights

Wall Street Journal: Tax Cut Growth Dividend
Wall Street Journal: Some Economists See Fiscal Policy Leading to More Aggressive Fed Rate Rises
MarketWatch: Jobless claims drop 9,000 to 233,000, cling near 45-year low
Economics21: Government Policy Mistakes Led to the Great Recession

Top Economic Indicator Highlights

Inflation Ticks Up; Normalization Continues

Consumer Price Index (CPI) (March 2018)

After slowing early-to-mid 2017, the inflation rate, as measured by the CPI—one of several inflation indicators—rose for a third straight month. Rising inflation rates usually make a faster pace of Fed interest rate hikes more likely. However, the Fed sets a symmetric 2% inflation target, meaning that monthly measures can fall above or below 2% as long as the long-run average is 2%. Additionally, the Fed prefers to use an inflation measure that is broader than CPI—the personal consumption expenditures (PCE) price index—which after five years still remains well below 2%.

Category (percentage change from same month last year)	Mar	Feb	Jan
Headline CPI	2.4%	2.3%	2.1%
Core CPI (excludes food and energy)	2.1%	1.9%	1.8%

Job Openings Remain at Record Highs

Job Openings and Labor Turnover Summary (JOLTS) (February 2018)

The number of job vacancies remains substantially elevated relative to December 2017. Over 6 million job openings suggest that the U.S. economy is still ramping up in the wake of the Tax Cuts and Jobs Act.

Category (seasonally adjusted levels)	Feb	Jan	Dec
Job Openings (thousands)	6,052	6,228	5,618
Hires (thousands)	5,507	5,574	5,264
Separations (thousands)	5,192	5,319	5,031