CHART OF THE WEEK: Impact of Failed Obama-Era Policies on Fiscal Situation

 

 

The top line on the chart is CBO’s most recent projection of the long-term ratio of debt to GDP, which is rising even faster than in its previous projection. The bottom line shows that CBO’s current debt trajectory would have been much less steep had the Obama Administration’s FY2010 projections of economic growth materialized. This does not even include the macroeconomic effects of higher GDP on federal revenues, which would have lowered the trajectory further. Because the promised growth dissolved into sluggish growth, subsequent Administrations and Congresses face a substantially more challenging fiscal situation.

 

LAST WEEK

News & Commentary Weekly Highlights

• Prince William Living: Reps. Comstock, Tiberi, Ryan, and Eshoo Form Microbusiness Caucus
• The Hill: New bill does hard job of injecting capital into needy communities
• AEI: How to Engineer a Trump Boom
• Wall Street Journal: U.S. Consumer Confidence Reaches Highest Level Since 2000

 

Top Economic Indicator Highlights

• PCE Deflator, excluding food and energy, year-over-year percentage change
  • Feb-2017: 1.8%                      Jan-2017: 1.8%                       Dec-2016: 1.7%.
  • The core Personal Consumption Expenditures (PCE) price index is a more comprehensive measure of price changes than the Consumer Price Index (CPI), and the Federal Reserve uses it for its inflation target of 2 percent.
  • Noteworthy: The Fed’s main inflation indicator was up 1.8 percent from this time last year. It is gradually moving up toward 2 percent, which makes additional Fed interest rate hikes this year more likely. Last Thursday the futures market attached a 50.7% probability to a Fed rate hike in June. After the PCE data last Friday, this rose to 58.7%.

 

JEC Releases

• February State Employment Data
• ‘Brexit’ Can Give Free Trade New Momentum

 

THIS WEEK

 

Upcoming JEC Hearing

• JEC to Hold Hearing on The Decline of Economic Opportunity in the United States: Causes and Consequences

 

Upcoming Economic Data and Events

• Monday
  • Construction (10:00am)
  • ISM Manufacturing (10:00am)
  • Motor Vehicle Sales (4:00pm)
• Tuesday
  • Trade Balance (8:30am)
  • CoreLogic Home Price Index (10:00am)
  • Manufacturers’ Shipments, Inventories, & Orders (10:00am)
• Wednesday
  • ADP National Employment Report (8:15am)
  • ISM Non-Manufacturing (10:00am)
• Thursday
  • Jobless Claims (8:30am)
• Friday
  • Employment Situation (8:30am)
  • Wholesale Trade (10:00am)
  • Consumer Credit (3:00pm)