It was a light week for economic data. The data that did come out was consistent with our expectation of near-3-percent real GDP growth for 2017Q4.
That is not to say that nothing much happened of consequence to the U.S. economy. The House Republicans continued to work on their tax bill. We could see a final vote on their plan before Thanksgiving.
Senate Republicans worked on their own plan. The early word on the Senate plan is that they may propose delaying the implementation of a 20 percent corporate tax rate until 2019.The Senate plan also is reported to stay with seven personal income tax brackets instead of the four proposed by House Republicans. According to Senate Majority Whip John Cornyn (R, Texas), he expects the full Senate to vote on that plan the week after Thanksgiving.
Scoring of the final House plan is crucial. The Congressional Budget office will estimate the impact of the House tax plan on the national debt. If the House tax plan is consistent with the budget agreement from early October, then the Senate will be able to use the reconciliation process for its final vote. This means that the Senate would be able to pass a tax bill with a simple majority of 51 votes instead of the normal 60.
We can reach a few conclusions from this week’s events on Capitol Hill. (1) There is obviously more negotiation needed before the House and Senate plans can be reconciled. (2) The odds of seeing a final tax bill before the end of this year still look reasonable, but are less than 100 percent. (3) Scoring of the final tax bill is subjective. We will not know with certainty the full implications of a new tax scheme until years after its implementation.
The Job Openings and Labor Turnover Survey for September showed no change in the strong job openings rate of 4.0 percent. The hiring rate for September ticked down to 3.6 percent. According to the Bureau of Labor Statistics, Hurricane Irma had no discernible effect on the JOLTS data for September.
Initial claims for unemployment insurance increased by 10,000 for the week ending November 4, to hit a still-low 239,000. Continuing claims for the week ending October 28 increased by 17,000, to hit 1,901,000.
The Federal Reserve’s Senior Loan Officer Opinion Survey for October showed easing standards for commercial and industrial loans, but tightening standards for consumer credit cards and auto loans.
For a PDF version of this report click here: Comerica_Economic_Weekly_11102017.
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