Friday, August 1, 2014

General Economics

Market Watch | ISM manufacturing index surges to 57.1% in July
The Institute for Supply Management said its manufacturing index rose to 57.1% last month from 55.3% in June, That was higher than the 56.0% forecast of economists surveyed by MarketWatch.
National Journal | The IMF Wants Your Gas to Be More Expensive
Fuel prices don't accurately reflect their environmental impact, the international body says in a new report.
Fox Business | Consumer Sentiment Hits Lowest Level Since March
The Thomson Reuters/University of Michigan's final July reading on the overall index on consumer sentiment came in at 81.8, a touch below the 82.0 estimate and down from the final June reading of 82.5.
Market Watch | Construction spending drops 1.8% in June
Spending on U.S. construction projects fell by 1.8% in June, with the decline coming almost entirely in commercial projects, the government said Friday. Outlays are still up 5.5% from the same time last year, however.
WSJ | Highway-Funding Bill Clears Congress
Senate Passes House Version of Legislation to Fund Highway and Mass-Transit Projects Through May, Acting Hours Before Government Was to Start Cutting Payments to States

Econ Comments & Analysis                                                                                            
Washington Times | EDITORIAL: ‘Operation Choke Point’: A noose for business
Administration beats a retreat from a scheme of intimidation.
Bloomberg | Food-Stamp Decline Shows Low-Income Relief: EcoPulse
Participation in the U.S. government food-stamp program is declining modestly as low-income Americans get some economic reprieve.
Washington Times | LAMBRO: The Obama discount
If Mr. Obama truly believes Americans have never had it so good since he took office, he’s been talking to the wrong people. He’s presided over an underperforming, slow job-growth, declining-income economy, according to just about every available economic measure.
American Enterprise Institute | The little-known FRED charts that reveal the state of the U.S. economy
Currently, we’re down to about two unemployed workers per job opening. That’s great news, even though so many people have left the labor force that the number of unemployed workers doesn’t tell you the whole story of the labor market.

WSJ: Real Time Economics | World Income Inequality Even Worse Than Within U.S.: St. Louis Fed
The income gap between rich and poor nations is more severe than the more highly publicized disparities between the top and bottom of the U.S. income ladder, according to a new study from the Federal Reserve Bank of St. Louis.

Health Care

Politico | Questions linger about Obamacare website, year 2 is expected to enroll millions of new people in Obamacare this fall and re-enroll millions more who signed up the first time around. It’s likely a more demanding task than the one that it buckled under last year.

Econ Comments & Analysis                                                                                            
Heritage Foundation | How the Affordable Care Act Fuels Health Care Market Consolidation
The national health care law reinforces the trend of providers, including doctors and hospitals, to merge into large regional health systems that dominate local markets. The law also introduces new rules and restrictions that will reduce the degree of competition in the insurance market.


Bloomberg | Fed’s Plosser Says Low-Rate Pledge Not Needed as Growth Rebounds
Federal Reserve Bank of Philadelphia President Charles Plosser said he voted against this week’s policy statement because its low-rate pledge is no longer appropriate after the economy “improved significantly,” while inflation and unemployment have moved closer to objectives.

Econ Comments & Analysis                                                                                            
Market Watch | Disagreement surfaces among Fed hawks on when to tighten
Two leading hawks on the Federal Reserve indicated on Friday that they disagreed on how close the central bank should be to raising interest rates.
Bloomberg | Banks Aren't Too Big to Fail Unless They Fail
One simple model is that the too-big-to-fail subsidy -- meaning the amount of money that big banks save on funding costs because their creditors assume that if anything goes wrong the government will bail them out -- is like a put option, putting some floor on the value of a bank's assets
Forbes | The Fed Needs Truly Radical Reform, Not A Timid Taylor Rule Fix
By keeping interest rates artificially low for an extended period, the Fed has encouraged risk taking, fueled asset prices, and greatly increased the probability of another boom-bust episode.
WSJ | WSJ's Hilsenrath: Fed Can Be Patient on Rate-Hike Debate After Data
Friday's employment and income reports pointed to steady U.S. job growth and firming but low inflation—trends that are likely to keep the Federal Reserve on course to end its bond-purchase program in October and remain patient before raising short-term interest rates.


Fox Business | What to Know about ObamaCare's Premium Tax Credit
Normally, tax credits are claimed at year end on your income tax return. However, this credit can be enjoyed right away. Beware, however, if you have a life-changing event that affects the premium tax credit, you will have to report the change to the marketplace.

Econ Comments & Analysis                                                                                            
Houston Chronicle | Laffer: End franchise tax, online loopholes
Now, state leaders have an opportunity to take this success even further by slashing the much-reviled Texas Franchise Tax. But to achieve this, Congress needs to close the online sales tax loophole and give back the state's authority over its own tax code.
Mercatus Center | Why We Should Scrap Mortgage Interest Deductions
Over 64% of the MID tax benefits go to tax filers earning more than $100,000, according to our new study released through the Mercatus Center at George Mason University. While the upper middle class does benefit from the deduction, the vast majority of the dollar benefits go to higher-income taxpayers.


Politico | Employment report shows jobs growing at steady pace
The Labor Department said Friday that the economy added 209,000 jobs in July while the unemployment rate ticked up to 6.2 percent. While Friday’s jobs report was less robust than many economists had expected, it still helps paint a broad picture of a strengthening labor market.

Econ Comments & Analysis                                                                                            
CRS | Small Business Administration and Job Creation
This report examines the economic research on net job creation to identify the types of businesses that appear to create the most jobs. That research suggests that business startups play an important role in job creation, but have a more limited effect on net job creation over time because fewer than half of all startups are still in business after five years.

WSJ: Real Time Economics | Economists React to July’s Jobs Report: ‘Not Weak, But…’
Economists were mixed in how they view the report: some have called it “encouraging,” while others consider it “disappointing.”


Bloomberg | Consumer Spending in U.S. Rose in June by Most in Three Months
Consumer spending in the U.S. rose in June by the most in three months, ending the quarter on a strong note and signaling that continued job growth will bolster the world’s largest economy.
WSJ | Argentine Debt Feud Finds Much Fault, Few Fixes
Argentina's default on $29 billion in debt brought a stock-market selloff and finger pointing by the Argentine government and creditors Thursday. But investors held out hope that a resolution to the crisis could be reached.

Econ Comments & Analysis                                                                                            
Cato Institute | China’s Risky Play in the U.S. Debt Market
China has picked up the pace of its purchase of Treasuries, but both it and the United States would be better off if it relied less on the accompanying investment and export-led model.