News
WSJ | Colombia Trade Deal Loses Key Support
The top Democrat on a key House trade panel whipped up a new furor over three stalled trade deals Monday when he said he wouldn't support a pact with Colombia if the White House and Republicans refuse to include references to pro-labor provisions negotiated by the Obama administration.
Washington Times | Spending dips in U.S. for first time in a year
Consumer spending failed to budge from April to May, evidence that high gas prices and unemployment are squeezing household budgets. When adjusted for inflation, spending actually dropped 0.1 percent last month, the Commerce Department reported Monday.
Market Watch | Cut mortgage-interest deduction: Fed official
Congress should reduce the amount of mortgage interest and debt payments that households and corporations can deduct to trim incentives for leverage, a regional Fed bank president said Monday.
Bloomberg | Home Prices in 20 U.S. Cities Fell 4% in April
A backlog of foreclosures and falling sales raise the risk that prices will decline further, discouraging builders from taking on new projects. The drop in property values and a jobless rate hovering around 9 percent are holding back consumer sentiment and spending, which accounts for 70 percent of the economy.
Politico | Breakthrough on trade may come
That deal could lead to a breakthrough on long stalled U.S. trade agreements with South Korea, Colombia and Panama. Those argreements were initially negotiated under Presdient George W. Bush and have been strongly opposed by organzied labor and many House Democrats.
Econ Comments
WSJ | The Deficit Is Worse Than We Think
Normal interest rates would raise debt-service costs by $4.9 trillion over 10 years, dwarfing the savings from any currently contemplated budget deal.
Blogs
Daily Capitalist | Why GDP Is Useless and Deceptive: There Was No Recovery
We have not recovered from the Great Recession and thus our current economic stagnation is less a new event than a continuation of the original collapse. The basis for the so-called “recovery” was a rise in GDP, that measure of what we have spent in the economy. It’s a fairly useless bit of data.
Reason Foundation | Debt Ceiling with GSEs on the Red Carpet
The debt ceiling itself is paralyzed with indecision. Yet there is another option the gossip pages haven't mentioned: a sunset date for Fannie Mae and Freddie Mac.
Reports
RCM: Wells Fargo | Consumer Spending Rose Less than Expected in May
Personal income rose 0.3 percent in May, while consumer spending was flat. Real outlays fell 0.1 percent. The core PCE deflator rose 1.2 percent and is still well within the Fed’s implicit comfort zone.
NBER | Confidence and the Transmission of Government Spending Shocks
There seems to be a widespread belief among economists, policy-makers, and members of the media that the "confidence'" of households and businesses is a critical component in the transmission of fiscal policy shocks into economic activity. We take this proposition to the data using standard structural VARs with government spending and aggregate output augmented to include empirical measures of consumer or business confidence.
