Oil Production Strong as Infrastructure Plan Comes into Focus
June 05, 2017
The U.S. has added oil rigs for the past 20 months and productivity has been revised up for Q1 2017, good signs for the economy. The White House is unveiling parts of their infrastructure plan this week, as well, which should attract bipartisan support. Dodd-Frank is also expected to be repealed in the House, but its future in the Senate is unclear.
- White House moves on to Infrastructure. President Trump is beginning to flesh out his plan to follow through with his campaign promise of $1 trillion in infrastructure investment. Both Republicans and Democrats want to see more spending in this area, so the measure is expected to have bipartisan support. The White House plans to promote various aspects of the plan this week, with announcements for a plan to privatize air traffic control, for updates to Ohio River infrastructure, and meetings with local and state officials in President Trump’s schedule. The $1 trillion in spending is proposed to come from public and private funds; officials have stated that roughly $200 billion will be in direct spending, with the remainder coming from private entities. That private investment will be spurred by tax breaks and deregulation. [WSJ]
- Dodd-Frank overhaul expected to pass in the House. The Financial CHOICE Act would undo much of the signature Wall Street reform bill passed following the financial crisis. The bill would let banks with enough cash opt out of Dodd-Frank. It would also change the schedule for federal stress tests to every two years. Further, it removes the ability for the federal government to label a bank “too big to fail,” a moniker that would allow the government to break up banks. The Treasury is expected to release reports on Dodd-Frank’s Financial Stability Oversight Council and Orderly Liquidation Authority this week as well, which will likely play a role in the Senate’s deliberations over the bill. [The Hill]
Economic Indicators & News
- Productivity revised up for Q1. Estimates that productivity was down .6% in the first quarter were revised up, but only to show that the figure was unchanged from Q1 2016. Over the last five years, productivity has increased at a rate of .6%, which is lower than the historic average and a potential problem for plans to grow GDP rapidly. Low productivity increases are a likely the result of low capital expenditure, however, some economists believe that productivity is being inaccurately measured in the information technology sector. [Reuters]
- Oil Rigs up for 20th week in a row. The United States currently has 733 oil rigs in operation, up 11 from last week, and also the largest increase in almost two months. Gas rigs fell to 182, down 3, putting the total rig count up by 8. Crude oil was down below $50 for the first time since May on Friday, although those changes were likely also affected by President Trump’s announcement that the U.S. would leave the Paris climate agreement. [Business Insider]