LAST WEEK

News & Commentary Weekly Highlights:

• Market Watch: Have Businesses Really Run Out of People to Hire? (Friday)
• Real Clear Markets: Look to Adam Smith for the Solutions to Our Stagnation (Thursday)
• Bloomberg: Fed Reins In Rate-Hike Path as Brexit Cited In Latest Pause (Wednesday)
• Wall Street Journal: Economic Growth Slowed in Most States Last Year (Tuesday)
• Real Clear Policy: Entitlement Reform Remains an Absolute Necessity (Monday)

 

Top Economic Indicator Highlights:

Consumer Price Index (May)

• Change from previous month: 0.2%
• Change less food & energy (M/M): 0.2%
• Noteworthy: The food index declined in May while the energy index increased 1.2%. The headline index rose 1.0% over the last 12 months, unadjusted. Core CPI (less food and energy) has increased 2.2% over the past 12 months. Real average hourly earnings, also released at the same time as CPI, were unchanged from April, with nominal gains matched by the 0.2% rise in CPI.
• Series Detail: The CPI is a collection of indexes that measures the average change in consumer prices over time for a fixed basket of goods and services from the perspective of the consumer, whereas the producer price index for final demand (PPI-FD) measures price changes from the producer’s perspective.

 

JEC Releases:

• Five Key Takeaways from CBO’s Analysis: The Distribution of Household Income and Federal Taxes, 2013 (Monday)
• “Don’t Know Much about a Science Book?”: A Graphical Guide on Employment in Science, Technology, Engineering and Mathematics (STEM) (Tuesday)
• June Federal Open Market Committee Announcement Review (Thursday)
• May State Employment Reports (Friday)

 

THIS WEEK

Upcoming Economic Reports & Releases:

Major Indicators

• Existing Home Sales (10am, Monday)
• New Home Sales (10am, Wednesday)
• Durable Goods Orders (8:30am, Thursday)

 

Reports & Releases

• The 2016 Annual Report of the Social Security Board of Trustees (Wednesday)

 

Chart of the Week:

 

 

The chart above, originally found in a previous JEC Republican Staff Analysis entitled “Is the ‘Full Employment’ Glass Half Full?” is updated to reflect the significant drop in the Federal Open Market Committee’s (FOMC) latest projections of the range of the longer run natural rate of unemployment, which would signify that an economy’s labor and capital resources are in full use. These projections are considerably lower than what the natural rate of unemployment was considered to be in the past. With a lower labor force participation rate today than the start of the recovery, even among prime-age workers (age 25-54), a lower rate of unemployment is not indicative of a healthy labor market as it may have been in the past. Determining the natural rate of unemployment, as well as the natural rate of interest, remain difficult for the Federal Reserve to determine, and lead some to suggest that lower rates than in the past is the “new normal.”