Trump Administration Finds Only $20 Billion In Existing Funds For Wall
March 02, 2017
The Department of Homeland Security reported on Wednesday that it could identify only $20 million in available funds to be redirected to begin construction of President Trump’s signature pledge to erect a border wall along the U.S.’s border with Mexico; Initial jobless claims declined to reach the lowest level for initial claims since March 31, 1973; Eurozone inflation accelerated to its fastest clip since January 2013 during February as consumer prices were up 2% from a year earlier; Chinese manufacturing activity rose at a faster-than-expected pace in February as demand picked up and stimulus momentum continued.
- The Department of Homeland Security reported on Wednesday that it could identify only $20 million in available funds to be redirected to begin construction of President Trump’s signature pledge to erect a border wall along the U.S.’s border with Mexico. The White House has promised a rapid start to the wall’s construction, claiming that it could be built using existing funds and resources from inside the executive branch, thus not having to leverage Congress to access additional capital. The Homeland Security report said the $20 million would be enough to cover a handful of contracts for wall prototypes, but not enough to begin construction of an actual barrier, meaning the Trump administration will likely need to convince Congress to appropriate funds. The report estimates total cost of the wall will be $21.6 billion at $9.3 million per mile of fence and $17.8 million per mile of wall. House Speaker Paul Ryan has said that he will include wall funding in his budget proposal for the next fiscal year. Homeland Security has a total annual budget of only $376 million. [Reuters]
Economic Indicators & News
- Initial jobless claims declined by 19,000 during the week ending February 25 to total 223,000 from the prior week’s revised-down level to reach the lowest level for initial claims since March 31, 1973 when it was 222,000. New claims have now held below the critical 300,000-threshold for 102 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 6,250 to 241,000 – the lowest level for the metric since April 14, 1973. Lagging continuing claims, meanwhile, rose by 3,000 to 2.066 million while the moving average for the metric was up 750 to 2.072 million. The market consensus was for 245,000 new claims last week. [DOL]
- Eurozone inflation accelerated to its fastest clip since January 2013 during February as consumer prices were up 2% from a year earlier, matching market consensus and a sequential increase of 0.2% from January. Rising oil prices have been pushing up inflation in the common currency zone, especially in Germany, Spain, and Italy. Producer prices signaled the rise, gaining 3.5% in January and exceeding expectations for 3.2% growth. Core inflation, meanwhile, which excludes volatile energy and food prices, was unchanged for the third consecutive month at 0.9%. Indeed, core inflation remains the primary focus for European central bankers in managing monetary policy. The European Central Bank, led by Mario Draghi, anticipates full-year price growth of 1.3% before accelerating to 1.5% in 2018. The metric is likely to overstate longer-run trends in months ahead due to price recovery in the energy sector. [Bloomberg]
- Chinese manufacturing activity rose at a faster-than-expected pace in February as demand picked up and stimulus momentum continued – the country’s official PMI level gained 0.3% to reach an expansionary reading of 51.6. Most subindexes rose, including those tracking new orders, production and exports, though China’s nonmanufacturing PMI fell to 54.2 from 54.6 in January. A competing private gauge of manufacturing activity – the Caixin China manufacturing PMI – gained 0.7% to reach 51.7. Manufacturing outperformance was led by greater demand in midstream industries such as steel and further restructuring of state owned enterprises. February’s reading is indicative of the success of the Chinese government in stewarding industrial reforms, as profits in the sector rose 8.5% last year versus a decline of 2.3% in 2015. The National People’s Congress is set to unveil its 2017 growth target on Sunday, which is anticipated to be about 6.5%. [WSJ]