GDP Contraction and US Oil Exports
June 25, 2014
First Quarter GDP Revised to Show Contraction of 2.9%; Commerce Dept. Makes Domestic Oil Export Exception
On the Hill
- In light of the recent VA scandal, Sen. Tom Coburn (R-OK) released a report citing lagging medical treatment and delinquent doctors and nurses as the reasons for the deaths of more than 1,000 veterans and costs of $845 million in medical malpractice suits to the U.S. government. Coburn, the ranking Republican on the Senate Committee on Homeland Security and Government Affairs, launched the investigation a year ago, and his report details instances of racism, abuse, and neglect in VA facilities across the country. The report also found that, on average, VA doctors saw fewer patients per year (~1,200) than their private-sector peers (~2,300).
- Sen. Sheldon Whitehouse (D-RI) resubmitted campaign finance legislation, known as the DISCLOSE Act, which would require all organizations that spend at least $10,000 on election ads to publicly identify all their donors. Whitehouse’s fellow Senate Democrats, including Sens. Harry Reid (D-NV) and Elizabeth Warren (D-MA), support the legislation. Warren has declared that a constitutional amendment is the only solution to overturning the Supreme Court’s ruling in Citizens United.
- GDP growth for the first quarter of 2014 was revised to show a rate of contraction of 2.9%, worse than market expectations.The consensus prior to the announcement was for the final reading of the Q1 GDP to show economic contraction by 1.8%, greater than the prior estimate of a 1.0% contraction.
- Durable goods orders declined by 1.0% in May from the previous month, much lower than the expected 0.4% increase.Excluding transportation orders, there was a milder 0.1% decrease in new orders in May, as there were increases in orders for fabricated metals and electrical equipment which outweighed the decreases in orders for primary metals and computers and electronics.
- The Commerce Department approved the requests of two U.S. companies to begin the export of unrefined oil, loosening the ban on domestic oil exports that has been in place since 1970.The narrow ruling only allows for the two companies, Pioneer Natural Resources and Enterprise Products Partners, to export a limited quantity of their ultralight oil known as condensate to foreign buyers, but the approval is likely to encourage similar requests from other companies. Commerce is working on industry-wide guidelines that could make it possible for more companies to sell U.S. oil abroad.