LAST WEEK

News & Commentary Weekly Highlights:

• Wall Street Journal: Fed’s July Minutes Show a Split Central Bank Seeking to Keep Options Open (Wednesday)
• Market Watch: Taxing the rich also taxes the little guy (Wednesday)
• Manhattan Institute: Inequality Is a Distraction. The Real Issue Is Growth. (Tuesday)
• Bloomberg: Denmark's Nice, Yes, But Danes Live Better in U.S. (Tuesday)
• Wall Street Journal: The Cure for Wage Stagnation (Sunday)

 

Top Economic Indicator Highlights:

Consumer Price Index (July 2016)

• Consumer price index for all urban consumers (year-over-year % changes)
  • CPI (includes food & energy)      July: 0.8%; June: 1.0%; May: 1.0%
  • Core (excludes food & energy) July: 2.2%; June: 2.3%; May: 2.2%
  • Noteworthy: Since July 2015, Energy prices fell 10.9% and food prices rose 0.8%.  Factors driving the Core CPI up were medical care services (+4.1%), medical care commodities (+3.6%) and shelter (+3.3%). The largest factor reducing the Core CPI was used vehicles (-3.7%).

 

JEC Releases:

• Top 10 Olympic Events That Remind Us of the Obama Economy:
  • #5: High Jump (Monday)
  • #4: Hurdles (Tuesday)
  • #3: Synchronized Swimming (Wednesday)
  • #2: Balance Beam (Thursday)
  • #1: Marathon vs. 100-Meter (Friday)
• Let Freedom Ring: Policies That Promote Freedom Also Promote Prosperity (Friday)
• July State Employment Reports (Friday)

 

THIS WEEK

Upcoming Economic Reports & Releases:

Major Indicators

• Chicago Fed National Activity Index (8:30am, Mon)
• Philly Fed Non-Manufacturing Survey (8:30am, Tue)
• New Residential Sales (10:00am, Tue)
• Richmond Fed Manufacturing Survey (10:00am, Tue)
• Revised Building Permits (8:00am, Wed)
• Existing Home Sales (10:00am, Wed)
• Advance Durable Goods (8:30am, Thu)
• Jobless Claims (8:30am, Thu)
• Advance Economic Indicators (8:30am, Fri)
• Michigan Consumer Sentiment (Final) (10:00am, Fri)
• Michigan Inflation Expectations (Final) (10:00am, Fri)

 

Chart of the Week:

 

 

This chart is for all the history buffs, current event junkies, and people who care about the future.  It shows the publicly held federal debt-to-GDP ratio from 1790 to the present, and the Congressional Budget Office’s projection from 2017 to 2046.  The chart is color coded by a given administration’s party affiliation and lists administration names in four-year spans.

 

Analyzing administrations by four-year terms gives the following records:

 

Record for the largest increases in debt-to-GDP ratios:

 

Administration	Percentage point change	Significant debt drivers
Roosevelt (1941-44)	+42	World War II
Obama (2009-12)	+31	“Stimulus” and Entitlement Spending
Wilson (1917-20)	+24	World War I
Lincoln (1861-64)	+24	Civil War

 

Record for the largest decreases in debt-to-GDP ratios:

 

Administration	Percentage point change	Significant debt-reduction drivers
Truman (1949-52)	-22	Post-World War II
Clinton (1997-2000)	-13	Spending reforms of Republican Congress
Washington (1793-96)	-12	Post-Revolutionary War
Eisenhower (1953-56)	-9	Large spending cuts

 

According to CBO projections, four future administrations will inherit a place in the top ten largest debt-to-GDP increases solely based on our current debt trajectory:

 

Administration	Percentage point change	Significant debt drivers
TBD I (2041-44)	+13	Spending decisions of the past
TBD II (2037-40)	+12	Spending decisions of the past
TBD III (2033-36)	+11	Spending decisions of the past
TBD IV (2029-32)	+9	Spending decisions of the past