Debt Limit Nears and Amazon Merger Under Scrutiny
July 14, 2017
The GOP is expected to tie raising the debt ceiling to a more popular bill, like expanding veteran’s health insurance options. Amazon’s purchase of Whole Foods is also being looked at by Democrats, who are looking to hold a Congressional hearing on the matter. June retail sales fell slightly while consumer prices remained constant.
- GOP may tie debt-limit increase to veterans. Currently, Republicans are considering connecting a must-pass increase in the federal debt limit to funding a program that allows military veterans to get medical care outside of Veterans Affairs facilities. The legislative move is still in its early stages on Capitol Hill, but the federal government has already hit the debt limit. The Treasury Department is currently using emergency cash-conservation steps to pay the government’s bills, but that is expected to run out in October. The upcoming debt-limit vote will be the first one since March 2006 with a Republican majority in the House, Senate, and White House. It is highly likely that the debt limit will be attached to the veteran’s bill or other must-pass legislation, to make it more politically popular. [WSJ]
- House Democrat wants hearing on Amazon’s Whole Food bid. Representative David Cicilline (D-RI), the ranking member of the House Judiciary Subcommittee on Regulatory Reform, Commercial and Antitrust Law, is calling for a closer examination of Amazon’s pending merger with Whole Foods. Cicilline called on Judiciary Committee Chairman Bob Goodlatte and subcommittee Chairman Tom Marino to hold a congressional hearing on the $14 billion acquisition. Cicilline said the deal “raises important questions concerning competition policy, such as how the transaction will affect the future of retail grocery stores, whether platform dominance impedes innovation, and if the antitrust laws are working effectively to ensure economic opportunity, choice, and low prices for American families.” [The Hill]
Economic Indicators & News
- U.S. retail sales fell 0.2% in June. Spending at U.S retailers declined in June for a second consecutive month. Retail sales, a measure of consumer spending at stores, restaurants, and websites, dropped a seasonally adjusted 0.2% in June from the previous month, as stated by the Commerce Department on Friday. Economists had previously expected a 0.1% rise versus the 0.2% drop. With May’s 0.1% decline, it was the first back-to-back retail sales drop since July and August 2016. In the second quarter, total retail sales were up 0.2% from the first quarter. Overall retail sales rose 3.9% in the first half of 2017, well outpacing the recent trend for consumer-price inflation. Consumer spending is the main driving force of the U.S economy, representing more than two-thirds of total economic output. Sales last month were unequal across categories, with grocery stores and restaurant spending decreasing but auto dealerships and building-material-and-garden-equipment shops increasing. Sales at department stores fell 0.7% last month, while non-store retail sales were up 0.4% from May as American shoppers shift to e-commerce. [WSJ]
- U.S. consumer price index remains unchanged. For the past month, U.S. consumer prices were unchanged, pointing to tame inflation and the softening of domestic demands that diminished prospects of a third interest rate increase from the Federal Reserve this year. The Labor Department stated that the unchanged reading in the Consumer Price Index came as the cost of gasoline and mobile phone services declined further. The CPI dropped 0.1% in May and is now causing concerns about price pressures. Financial markets were indicating a 55 percent chance of a 25 basis point rate hike this December but dropped to 47 percent after the report released today. [Reuters]