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Despite a recent uptick, the number of people filing claims for unemployment insurance plunged by 27,000 last week, resuming its downward trend. It remains near lows not seen since the late 1960s. Along with accelerating wage growth and a record number of job openings, this indicates workers are reaping the benefits of pro-growth tax and regulatory reforms.
Pro-growth policies are working: Since the enactment of the Tax Cuts and Jobs Act, growth in earnings of rank-and-file workers has accelerated to a recovery high, while inflation is below the Fed’s 2 percent inflation target.
In addition to providing broad-based tax relief, the Tax Cuts and Jobs Act created Opportunity Zones (OZs), drawn from legislation introduced by Senator Tim Scott (S.293) and former Representative Pat Tiberi (H.R.828), the Investing in Opportunity Act. OZs encourage long-term private capital investment to revitalize low-income areas.

November FOMC Review

Nov 15 2018

The economy’s resurgence, driven by pro-growth regulatory reform and the Tax Cuts and Jobs Act, has enabled the Federal Reserve to normalize interest rates, i.e., get them to a level that is more consistent with historical norms, and to start shrinking its balance sheet. To realize the full effects of pro-growth policies, the Fed must essentially “thread the needle”: Some additional interest rate hikes may be warranted as the economy continues to improve, but they should not be so rapid as to disrupt the recovery.