Weekly Economic Update: March 19 - March 23
CHART OF THE WEEK
JEC’s Annual Report: U.S. Economy has Room for Faster Growth
In the Joint Economic Report’s opening chapter, JEC Chairman Erik Paulsen concluded that:
The JEC Majority is convinced that the U.S. economy has room to grow faster and, belatedly, experience some of the normal bounce-back from the recession. Market-oriented policies can release faster growth in the near term and better position the economy to counteract adverse long-term trends—particularly the aging population—so that it can reach a steady growth rate, closer to the historical average of somewhat over 3 percent. We have taken the first major step in that direction with tax reform, and we will continue to press on with other pro-growth policies.
JEC’s Annual Report can be found here.
Chairman's Update:
Chairman Paulsen spoke with Tom Keene and Francine Lacqua on Bloomberg Surveillance about the JEC’s new 2018 report, President Trump’s decision to hire CNBC contributor Larry Kudlow as economic adviser, and why the progress made by the Tax Cuts and Jobs Act might be threatened by new tariffs. Click below to watch.
Watch Chairman Paulsen tout JEC’s new report!
In an oped on tax reform, Chairman Paulsen argued that the economy was growing thanks to sound economic policy:
“While there has been a lot of Armageddon and doomsday rhetoric about tax reform from those with a political agenda, the reality is that it was our severely outdated tax code — not tax reform — that was hurting Minnesotans and their families. No one could defend the status quo because it was holding back our economy, keeping wages lower, and driving jobs, manufacturing and headquarters overseas."
And the Minneapolis Star Tribune took notice of the JEC’s hearing on the President’s 2018 Economic Report:
Click here to read the Star Tribune’s coverage of the JEC Hearing
LAST WEEK
JEC Releases
The 2018 Joint Economic Report
News & Commentary Weekly Highlights
CNBC: The Fed doesn't understand the causes of inflation: Larry Kudlow
Wall Street Journal: Lawrence Kudlow [incoming NEC chair] Is Fan and Critic of Trump’s Economic Positions
The Hill: Senate passes bipartisan bill to roll back Dodd-Frank
Top Economic Indicator Highlights
Evidence that the Economy isn't Overheating
After slowing early-to-mid 2017, the Consumer Price Index, which measures inflation, resumed an upward trend in recent months. Rising inflation rates make Fed interest rate hikes more likely. However, personal consumption expenditures, as a measure of inflation, still persistently remains below the Fed’s symmetric 2% inflation target. This implies the economy is not “overheating.” (Source: Consumer Price Index, January 2018)
Category (percentage change from same month last year) |
Feb |
Jan |
Dec |
Headline CPI |
2.26% |
2.14% |
2.11% |
Core CPI (excludes food and energy) |
1.86% |
1.85% |
1.76% |
Industrial Production: Fastest Increase since March 2011
At 4.3%, February saw the fastest year-over-year increase in industrial production since March 2011; capacity utilization rose to its highest since January 2015. The Fed’s industrial production index covers nearly everything tangible produced in the United States. (Source: Industrial Production and Capacity Utilization, February 2018)
Category |
Feb |
Jan |
Dec |
Industrial production (year-over-year percentage change) |
4.3% |
3.5% |
3.5% |
Capacity utilization (percent of capacity in active use) |
78.1% |
77.4% |
77.8% |
Help Wanted: Record Job Openings
The number of job vacancies increased substantially in January. This suggests that the U.S. economy is ramping up in the wake of the Tax Cuts and Jobs Act. (Source: Job Openings and Labor Turnover Summary (JOLTS), January 2018)
Category (seasonally adjusted levels) |
Jan |
Dec |
Nov |
Job Openings (thousands) |
6,312 |
5,667 |
5,933 |
Hires (thousands) |
5,583 |
5,524 |
5,514 |
Separations (thousands) |
5,409 |
5,314 |
5,254 |
THIS WEEK
Upcoming Economic Data
Monday
No releases
Tuesday
No releases
Wednesday
Existing Home Sales (10:00am)
Federal Reserve FOMC Meeting Statement (2:00pm)
Thursday
Jobless Claims (8:30am)
Housing Price Index (FHFA) (9:00am)
PMI Composite Flash (9:45am)
Leading Indicators (10:00am)
Kansas City Fed Manufacturing Index (11:00am)
Federal Reserve Balance Sheet (4:30pm)
Money Supply (4:30pm)
Friday
Manufacturers’ Shipments, Inventories, & Orders (Advance) (8:30am)
New Home Sales (10:00am)