Congress Works On Tax Policy Reform, US Jobless Claims Remain At Historically Low Levels
February 23, 2017
Treasury Secretary Steven Mnuchin said that Congress was working through differences on tax policy reform; Initial jobless claims increased by 6,000 during the week ending February 18, but remain at historically low levels; U.S. crude oil inventories increased by 0.6 million barrels last week as total crude reserves stood at 518.7 million barrels; Eurozone consumer prices were up in the past year, encouraging to the ECB, which has struggled to lift inflation.
- Treasury Secretary Steven Mnuchin said that Congress was working through differences on tax policy reform as the Trump administration aimed to pass an overhaul before the August recess, among other areas of policy discussed in a Wednesday interview. Mnuchin offered that the Trump administration is aiming for a 3% or higher annual growth rate, decrying slower economy growth since the financial crisis as an anomaly and a result of Obama administration policies, despite Federal Reserve projections for 1.8% long-run annual GDP growth. Plateauing labor market growth and lower worker productivity have subdued economic expansion in recent quarters, though Mnchin said the President Trump tax and regulatory reforms would spark a reversal in those metrics. Secretary Mnuchin would not discuss the administration’s view on making the tax reforms revenue neutral. The secretary expressed concern regarding a border adjustment tax, saying that the Treasury is assessing its potential impact on the value of the dollar. Regarding currency, Mnuchin said that the present strength of the dollar reflects the relative strength of the U.S. economy compared to the world and that he welcomes bilateral discussions with China regarding its currency and trade policies. [WSJ]
Economic Indicators & News
- Initial jobless claims increased by 6,000 during the week ending February 18 to total 244,000 from the prior week’s revised-down level of 238,000 to remain at historically low levels. New claims have now held below the critical 300,000-threshold for 101 consecutive weeks, the longest such streak since 1970 – a time during which the labor market and population were much smaller. The four-week moving average accounting for week-to-week volatility declined by 4,000 to 241,000 – the lowest level for the metric since July 21, 1973. Lagging continuing claims, meanwhile, fell by 17,000 to 2.060 million while the moving average for the metric was down 10,750 to 2.070 million. The market consensus was for 244,000 new claims last week. [DOL]
- U.S. crude oil inventories increased by 0.6 million barrels last week as total crude reserves stood at 518.7 million barrels, meaningfully above the upper limit of the average range for this time of year, though American petroleum imports were down by 1.2 million barrels to 8.5 million barrels per day. Petroleum refinery inputs fell by 187,000 barrels per day to 15.3 million as refineries operated at 84.3% of their available capacity. Gasoline production increased last week to average 9.4 million barrels per day while distillate fuel production fell to 4.5 million barrels per day. Total product supplied to end users rose by 0.7% over the year ago period to 19.8 million barrels per day. Motor gasoline supplied dropped 5.2% over the same period last year to 8.6 million barrels. [EIA]
- Eurozone consumer prices were 1.8% higher in the 12 months ended in January, an encouraging sign for the European Central Bank, which has struggled to lift inflation to its 2% target after years of loose monetary policy. Prices jumped from 1.1% growth recorded in December as Ireland, which had previously been in deflation, saw prices rise by 0.2% after a fall of the same magnitude in the prior month. As recently as May 2016, prices were down on the year across the Eurozone as a whole, though recovering energy prices have driven inflation steadily higher since then. There remains wide divergences across member states, with inflation being the highest in Belgium at 3.1% with Spain close at 2.9%. German price growth was 1.9%, though core inflation was unchanged at 0.9%, lower than the January 2016 level. [WSJ]