Weekly Economic Update: February 12 - February 16, 2018
CHART OF THE WEEK
Business Investment Surges in 2017
One of the key drivers behind 2017’s improved economic growth was business investment, notably in equipment, as the chart shows. Between 2009 and 2016, the amount of capital workers had to work with stagnated. This hindered productivity growth and, consequently, wage growth. This pickup in investment should help to reconstitute productivity and wage growth. Expectations of less onerous, more efficient regulation and taxation (as outlined in policy frameworks), followed by actual reform and improvement, likely helped drive the upswing in investment. In particular, the focus on immediate expensing of capital investments by Congress throughout the tax reform process was seen as an encouraging sign by the private sector. Now, this policy is a centerpiece of the Tax Cuts and Jobs Act.
LAST WEEK
News & Commentary Weekly Highlights
Wall Street Journal: It Takes Chutzpah to Call This the ‘Obama Boom’
CNBC: Fed won't overreact to good economic news, Williams says
Wall Street Journal: Challenges on Inflation Policy, Tax Cut Loom as Powell Era Begins at Fed
Bloomberg: The Real Mystery About Low Inflation
Top Economic Indicator Highlights
Job Openings and Labor Turnover Summary (JOLTS) (December 2017)
Category (seasonally adjusted levels) |
Dec |
Nov |
Oct |
Job Openings (thousands) |
5,811 |
5,978 |
5,925 |
Hires (thousands) |
5,488 |
5,493 |
5,592 |
Separations (thousands) |
5,238 |
5,212 |
5,251 |
Noteworthy: There were 5.5 million hires and 5.8 million openings in December. Until late 2014, the number of hires had always exceeded the number of job openings. JEC held a hearing in July last year on the unusually large number of job vacancies.
THIS WEEK
Upcoming OMB Release
President’s Budget (Monday)
Upcoming Economic Data
Monday
No releases
Tuesday
NFIB Small Business Optimism Index (10:00am)
Wednesday
Consumer Price Index (8:30am)
Retail Sales (8:30am)
Atlanta Fed Business Inflation Expectations Survey (10:00am)
Business Inventories (10:00am)
Thursday
Jobless Claims (8:30am)
Empire State Manufacturing Survey (8:30am)
Philly Fed Manufacturing Survey (8:30am)
Producer Price Index (8:30am)
Industrial Production and Capacity Utilization (9:15am)
Housing Market Index (HMI) (10:00am)
Federal Reserve Balance Sheet (4:30pm)
Money Supply (4:30pm)
Friday
Housing Starts (8:30am)
Import and Export Prices (8:30am)
Consumer Sentiment (10:00am)