Jobless Claims Drop, Consumer Inflation Rises
March 01, 2018
GOP considers budget maneuver to help pay for additional ObamaCare healthcare funding; U.S. weekly jobless claims drop to lowest level since 1969; U.S. consumer inflation increases in January.
- GOP considers budget maneuver to help pay for additional ObamaCare healthcare funding. Republicans are weighing whether to use a complicated budget maneuver to help pay for additional ObamaCare funding, according to sources. The idea is being considered by House Republican leaders and is controversial as it would help fund key ObamaCare payments to insurers, something that many conservatives believe is a “bailout” of the law. Under the possible plan, the House Budget Committee would direct the Congressional Budget Office (CBO) to take ObamaCare payments to insurers known as cost-sharing reductions out of its “baseline” for projecting federal spending. The agency would essentially stop assuming that the ObamaCare payments would be made. The shift by the CBO would then unlock the second step of the Republican plan. If they subsequently proposed making the cost-sharing reduction payments, then the CBO would then score the proposal as saving the government money. These savings could then be used to pay for additional ObamaCare stability funding to pay for reinsurance and bring down premiums. Thus, making the ObamaCare payments would save the government money as premiums decrease. The end result would allow Republicans to fund the ObamaCare payments without having to determine a budget offset to pay for them. [The Hill]
Economic Indicators & News
- U.S. weekly jobless claims drop to lowest level since 1969. The number of Americans filing for unemployment benefits unexpectedly decreased last week, hitting the lowest level in more than 48 years and indicating that the labor market is rapidly tightening. Initial claims for state unemployment benefits dropped 10,000 to a seasonally adjusted 210,000 for the week ended Feb. 24, the lowest level since December 1969, according to the Labor Department on Thursday. Claims for the prior week were also revised to show 2,000 fewer applications for unemployment benefits than previously reported. Economists polled by Reuters had expected claims to rise to 226,000 in the latest week. Last week was the 156th straight week that claims remained below the 300,000 threshold. [CNBC]
- U.S. consumer inflation increases in January. U.S. consumer prices increased in January, with a gauge of underlying inflation posting its largest gain in 12 months. The Commerce Department reported on Thursday that consumer prices as measured by the personal consumption expenditures (PCE) price index increased 0.4 percent, the largest increase since September, following a 0.1 percent again in December. In the 12 months through January, the PCE price index increased 1.7 percent after a similar gain in December due to base effects. Excluding the volatile food and energy components, the PCE price index advanced 0.3 percent in January, the largest increase since January 2017. The so-called core PCE index, the Federal Reserve’s preferred inflation measure, rose 0.2 percent in December. [CNBC]