Trump’s Secretary of Treasury Undergoes Confirmation Hearing, US Jobless Claims Fall to 43-year Low
January 19, 2017
Confirmation Hearing for Trump’s Secretary of Treasury Pick Steven Mnuchin To Address Important Policy Issues; U.S. jobless claims fall to near 43-year-low to 234,000 for week ended Jan. 14; Domestic housing starts total 1.226M in December.
- Confirmation Hearing for Trump’s Secretary of Treasury Pick Steven Mnuchin To Address Important Policy Issues. President-elect Donald Trump’s nominee for the Treasury secretary, Steven Mnuchin, is undergoing his confirmation hearing with the Senate on Thursday. Topics that have been discussed so far include the Volcker rule, the survival of the Consumer Financial Protection Bureau and offshore funds, according to Politico’s update. In terms of bank regulations, Mnuchin endorsed the Volcker Rule, adding that he would want to look at concerns that the implementation of the rule was holding back banks from creating liquidity for customers. He also said the new administration will consider supporting a major restructuring of the largest U.S. banks, telling the Senate Finance Committee that the “administration will look at Glass-Steagall.” Glass-Steagall refers to the depression-era law that had once barred traditional banks from merging with Wall Street investment banks and was repealed in 1999. Though Mnuchin didn’t say what he saw as the modern version of the law, he acknowledged that a proposal could have significant ripple effects. In terms of tax policy, Mnuchin suggested a solution to preventing inversions – or companies moving their headquarters abroad to save on taxes – would be to close the corporate tax gap between the U.S. and other countries. Mnuchin also addressed Trump’s ‘Big Border Tax’ proposal, saying that the border tax was not across-the-board, but would be targeted at companies that move production abroad and then send products into the United States. He also signaled that the Trump administration may have a different approach to IRS funding, which suffered significant budget cuts under Republican control over the last six years. In the hearing, he said that the Consumer Financial Protection Bureau (CFPB) was worth keeping but should be funded through congressional appropriations instead of from the Federal Reserve. Other major topics that the Wall Street Journal and Fortune predict the hearing may cover include infrastructure spending, tariffs, labor productivity and income inequality. [WSJ, Fortune, Politico, WSJ]
Economic Indicators & News
- U.S. jobless claims fall to near 43-year-low to 234,000 for week ended Jan. 14. The number of Americans filing for unemployment benefits fell unexpectedly last week to a near 43-year-low, according to the Labor Department. In the report, the Department said that initial claims for state unemployment benefits fell 15,000 to a seasonally adjusted 234,000 for the week ended Jan. 14. That level was just 1,000 more than the 233,000 level of mid-November, which was the lowest since November 1973. This marks the 98th straight week that claims remained below 800,000, a threshold signaling a healthy labor market. The four-week moving average of claims which accounts for week-to-week volatility fell 10,250 to 246,750 last week, the lowest level since November 1973. The data points to a tightening in the labor market that should help with economic growth this year. [Reuters]
- Domestic housing starts total 1.226M in December. U.S. housing starts increased 11.3 percent to a seasonally adjusted annual rate of 1.23 million units last month, according to the Commerce Department on Thursday. November’s starts were also revised up from a 1.09 million-unit pace to a 1.10 million-unit rate. Economists polled by Reuters had forecasted housing starts to increase to a 1.20-million-unit annual rate in December. Groundbreaking on new housing projects increased 4.9 percent to 1.17 million in 2016. Even as mortgage rates have jumped above 4 percent, the data indicates that the housing market remains on solid ground. The tightening labor market is also driving up demand for multi-family housing, placing upward pressure on rents. Permits for future home construction slipped 0.2 percent to a 1.21 million-rate last month as approvals for the multi-family segment decreased 9.0 percent. Permits for single-family homes construction rose 4.7 percent. [CNBC, Reuters]