Income Rises for Low-Income Earners as GDP Growth Revised Up
July 22, 2017
Yesterday, Senator John McCain announced that he was diagnosed with brain cancer. His absence will loom large in the Senate, both as a leader and in crucial votes to come. As the labor market continues to tighten, low-income earners are seeing large salary increases. GDP is also improving, with the NY Fed raising expectations for the indicator.
- McCain’s absence leaves large hole in Senate. Yesterday, Sen. John McCain announced that he has been diagnosed with a brain tumor and will be away from Capitol Hill for treatment. His sudden absence leaves a giant hole in the middle of the Republican Conference as Senate GOP leaders and President Trump need McCain’s support. McCain is one of the strongest GOP voices, especially on defense and foreign policy issues. He has previously pushed to expand the U.S.’ presence overseas and has pushed for hard-line military policies. Without Senator McCain, Senate Majority Leader Mitch McConnell will lose a dependable vote on advancing a repeal and replacement of Obamacare. In addition, McCain, as chairman of the Senate Armed Services Committee, may not be able to oversee completion of the annual defense authorization bill, which is expected to be taken up on the Senate floor early next week. [Politico]
Economic Indicators & News
- Low-income earners see weekly pay gain faster than other groups. The tightening of the labor market seems to be resulting in better and higher pay for workers making the least amount of money in the market. This pay increase for low-income earners, including restaurant workers, is a boost for workers who have yet to experience such a gain since the end of the recession eight years ago. Weekly pay for full-time earnings rose at a faster rate last quarter than for any other group measured by the U.S. Labor Department. Usual weekly earnings at the bottom of the pay scale rose 3.4% from a year earlier in the second quarter, which was stronger than the median gain of 3.2% and 3.1% for workers at the 90th percentile. This recent improvement coincides with the downward trend in the U.S. unemployment rate, which hit 4.4% last month. [WSJ]
- N.Y. Fed raises U.S. second and third quarter GDP growth outlook. The New York Federal Reserve stated on Friday that it has increased its estimates on the U.S. gross domestic product for the second and third quarter based on the most recent data on home construction, which hit a four month high in June. The regional central bank’s “Nowcast” model forecasted that the economy was expanding at an annualized pace of 2.04% in the second quarter, faster than the 1.9% shown the previous week. This program showed third-quarter GDP growth at 1.95% which was a higher forecast than the 1.84% calculated a week ago. [Reuters]