U.K. Unemployment At A 7-Year Low
April 17, 2015
House Votes Along Party Lines To Repeal The Federal Estate Tax; Consumer Prices Gained For A Second Consecutive Month In March; U.K. Unemployment At A 7-Year Low.
- The House of Representatives voted 240-179 along party lines to repeal the federal estate tax on Thursday in a move that aims to alleviate the tax burden on households with large farms or businesses. The current version of the estate tax impacts only about 5,400 families each year, or 0.2% of all estates. An elimination of the estate tax would cost the government an estimated $270 billion in revenues over the next 10 years, though Republican supporters believe that it would promote entrepreneurship and higher levels of employment growth, thus higher net tax inflows. Meanwhile, the House also voted 272-152 to make permanent a federal deduction for state and local sales tax with some bipartisan support, a measure that would increase the federal deficit by $42 billion over the next decade. President Obama has threatened to veto both pieces of legislation should they reach his desk, as he claims they would negatively impact ongoing efforts to reduce the federal government’s budget deficit. [FT]
Economic Indicators & News
- Consumer prices gained for a second consecutive month in March, rising 0.2% due to continued upward pressure in the energy sector. Gasoline prices have rebounded from their 18.7% plunge in January and rose 3.9% in March, though food prices slipped by 0.2%. Overall, energy prices rose 1.0% and 1.1% in February and March, respectively, though they are still down 18.3% on the year. Excluding energy and food, consumer prices rose 0.2% last month. Year-over-year, consumer prices have gained 1.8%. [BLS]
- Consumer sentiment remained strong in April’s reading of the University of Michigan consumer sentiment index, increasing to 95.9 in the preliminary reading from 93.0 in March. The current conditions component jumped to 108.2 from 105.0 last month, indicating potential growth in retail sales. The expectations component rose to 88.0 from 85.3, as Americans remain optimistic about employment and wage growth. Inflation estimates remain soft, however, as low gas prices have brought one-year expectations down 0.5% to 2.5%. Year-over-year, consumer confidence has gained 14.0%. [UMich]
- Unemployment in the United Kingdom has reached a seven-year low, according to Prime Minister David Cameron’s Conservative coalition government, as strong hiring in the country has increased the number of employed individuals to 31 million and decreased the rate of those actively looking for work to 5.6% at the end of February. The employment rate is 73.4%, the highest since records began in the 1970s. Wage growth has been stagnant, however, and real incomes are, in fact, £1,600 lower than they were in 2010. Nominal wages are 1.7% higher on the year, and the Bank of England forecasts individual earnings to increase 3.5% by the end of 2015. [FT]