Weekly Economic Update: January 8 – January 12, 2018

January 08, 2018

CHART OF THE WEEK

Untapped Labor Potential Could Increase U.S. Economic Growth

Change in Prime-Age Labor Force Participation from Pre-Recession Rates

The labor force participation rates of the prime working-age (25 to 54) population remained relatively stable or increased in other G7 countries since 2007. However, the U.S. rate of 81.7 percent in 2017 remains well below its 2007 rate of 83.0 percent (average annual rates). This difference amounts to 1.7 million prime working-age people, and implies the U.S. economy has considerable untapped potential.

LAST WEEK

News & Commentary Weekly Highlights

Fortune: President Trump Surfs a Prosperity Wave That Could Grow Larger

CNBC: ISM manufacturing and construction spending both clock gains

Bloomberg: Fed's Bullard Says Tax Overhaul May Light Fire Under Investment

Economics21: Follow the UK Model for Entitlement Reform

Wall Street Journal: What Economic Forecasters Got Right, and Wrong, in 2017

Tax Foundation: 2018 Tax Brackets

JEC Releases

December 2017 Jobs Review

Top Economic Indicator Highlights

Employment Situation (December 2017)

Category	December	November	October
Nonfarm payroll jobs (thousands)	148	252	211
Headline unemployment rate (U-3)	4.1%	4.1%	4.1%
“True” unemployment rate (U-6)	8.1%	8.0%	8.0%

Employment Situation December 2017

Noteworthy: Just over a year ago, the median projection of economists surveyed by Bloomberg was that the economy would create slightly less than 2 million jobs in 2017 and that the unemployment rate would be 4.6% at the year’s end. In 2017, 2.1 million jobs were created and the unemployment rate was 4.1%. The “real” unemployment rate fell from 9.1% to 8.1% over the year. Moderate wage growth and a low prime-age LFPR imply there is room to further accelerate economic growth.