May 3, 2019 | MacIver News Service
It’s Friday, which means another work week is in the books. This week interest rates remain low, productivity is up, and Wisconsin’s economy had its best year since 2010. As you prepare for another great Wisconsin weekend, here are important stories for the fiscal conservative, in case you missed it.
Wisconsin GDP Growth Best Since 2010
Wisconsin’s 2018 GDP grew by 2.5 percent last year, the best since 2010 and 17th best among the states. Among midwestern states, Wisconsin ranked second only to Michigan, which grew by 2.7 percent. The manufacturing industry ranked number five in growth in the country. Overall, manufacturing contributed 0.97 percentage points of Wisconsin’s economic growth in 2018.
This week in Venezuela, unrest broke out as the protests took place to attempt to remove the socialist president, Nicolas Maduro. The demonstrations in Caracas are led by opposition leader, and U.S.-recognized president, Juan Guaidó. Maduro’s regime is currently supported by Russia and Cuba, with Cuba sending 20,000 troops and agents to assist, according to the Trump administration. John Bolton has argued Guaidó is the legitimate president, and is not leading a coup, rather rightfully taking control of the government.
The Tax Cuts and Jobs Act of 2017 continues to strengthen the economy, and that effect is still strong across Wisconsin. The lower tax rates that corporations are now paying have allowed for them to reinvest, give their employees raises and expand the workforce. There has been lots of coverage about the tax cuts, but the cuts can be summed up in two words: it’s working.
Federal Reserve Not Raising Interest Rates
On Wednesday, the Federal Reserve announced that it would not raise interest rates again, and will keep its benchmark rate in the range of 2.25 percent to 2.5 percent. In addition, inflation continues to be low, at.5 percent lower than the Fed’s target of 2 percent. The Fed also gave a more optimistic view of the economy than it did earlier in the year. Chairman Jerome Powell announced that the Federal Reserve committee is comfortable with its current policy. This comes at a time when President Trump continues to advocate for lower interest rates, something few mainstream economists agree with him on.
In an opinion piece for The Hill, Jonathan Bydlak founder and president of the Institute for Spending Reform, contends that the entitlement crisis is now. This comes on the heels of last week’s report the Social Security Trust Fund will be spending more than it takes in starting in 2020, and will be completely depleted by 2035. The money in the trust fund is not tangible, but rather is pulled from other parts of the budget to make sure the Social Security checks go out.
U.S First Quarter Productivity Up, Labor Costs Down
U.S first quarter productivity grew at its fastest pace since 2014. Non-farm productivity increased at an annualized rate of 3.6 percent during the first quarter. This is the strongest showing since the third quarter of 2014. This exceeded expectations from Reuters, which predicted a 2.2 percent increase. At the same time, unit labor costs, which measure price of labor for a single unit of output, fell by 0.9 percent. Hourly wages also increased by 2.6 percent in the first quarter.