Senate Passes Joint Congressional Budget To Eliminate Fiscal Deficit
May 06, 2015
Senate Passes Joint Congressional Budget To Eliminate Fiscal Deficit Over The Coming Decade; ADP Employment Report For April Suggests 169,000 Private Sector Jobs Were Added Over The Month; BLS Reports Labor Productivity Dipped Over The First Quarter; U.S. Trade Deficit Widens To A Six-Year High.
- Yesterday, the Senate passed a joint congressional budget plan that would eliminate the fiscal deficit over the coming decade. The plan would accomplish deficit reduction by significantly cutting spending on discretionary programs, reforming Medicare, and repealing key provisions of the Affordable Care Act. The Republican plan passed along party lines by a vote of 51-48. However, if appropriations bills fail to advance in the House, the debate over the budget will begin again. Despite the broad Republican support for the budget, it remains to be seen whether appropriations bills to facilitate some of the most contentious spending cuts can receive the necessary Republican support to steer past overwhelming opposition from Democrats. [NYT]
Economic Indicators & News
- The ADP Employment Report for April released today suggests that 169,000 private sector jobs were added over the month, falling well below market expectations that averaged closer to 200,000 jobs. The 169,000 mark is also below the 175,000-job estimate for March. In March, the weakness in the ADP employment report served to accurately predict weakness in the BLS jobs numbers; it remains unclear whether the April ADP estimate will again match the outlook in Friday’s forthcoming BLS employment report. The ADP jobs numbers were held back by of weakness in the goods-producing sectors, where manufacturing jobs reportedly declined by 10,000 in April. [ADP]
- According to data released today by the Bureau of Labor Statistics, labor productivity dipped over the first quarter, falling by an annualized rate of 1.9%. Output reportedly decreased by 0.2% as hours worked increased by 1.7%. Notably, manufacturing sector productivity dipped by 1.1% as productivity in the durable manufacturing sector dropped by 2.3%. Unit labor costs increased by 5.0% in the first quarter as a result of the productivity decline and an increase of 3.1% in hourly compensation. [BLS]
- The U.S. trade deficit widened in March to a six-year high with net exports of -$51.4 billion, as imports surged with the resolution of the West Coast dockworkers’ strike and the continued strength of the dollar. Imports rose by $17.1 billion to $239.2 billion while exports, led by aircraft, increased by only $1.6 billion to $187.8 billion. Petroleum wasn’t a significant factor in the trade deficit this month, as the drop in prices was offset by a rise in volume. The American trade deficit with China widened to $31.2 billion compared to $22.5 billion in February and the gap with Japan rose to $7.1 billion versus $4.2 billion in the previous period. The market expectation was for net exports of $-42.0 billion in March. [Census]