Council of Economic Advisers Blog

  • Chairman Alan Krueger Addresses “Fairness as an Economic Force” before a Conference at Oberlin College

    On April 26, 2013, President Obama’s Chairman of the Council of Economic Advisers, Alan B. Krueger, delivered remarks on “Fairness as an Economic Force” at a conference on “Learning and Labor Economics” at Oberlin College in Oberlin, Ohio.

    Read Chairman Krueger’s Remarks HERE

    Read the excerpts of Chairman Krueger’s remarks HERE

  • Advance Estimate of GDP for the First Quarter of 2013

    Today’s report indicates that the economy posted its fifteenth straight quarter of positive growth, as real GDP (the total amount of goods and services produced in the country) grew at a 2.5 percent annual rate in the first quarter of this year, according to the “advance” estimate released by the Bureau of Economic Analysis. Over the last fifteen quarters, the economy has expanded by 8.3 percent overall, and the private components of GDP have grown by 12.2 percent. Real GDP is now 3.2 percent larger than it was at the previous business cycle peak in 2007:Q4. While there is more work to be done, this report, together with other economic indicators, provides further evidence that the economy is moving forward in the right direction.

    It is important to recognize that GDP is made up of various components. Personal consumption expenditures, for example, rose by 3.2 percent at an annual rate in 2013:Q1, the fastest rate in over two years. Residential investment grew by 12.6 percent last quarter and has increased for eight quarters in a row, its longest streak since 2004-2005. Federal defense spending fell 11.5 percent at an annual rate in 2013:Q1, while federal nondefense spending declined at a 2.0 percent rate and state and local government purchases fell at a 1.2 percent rate.

    The “advance" estimate of first quarter GDP growth encompasses the first month after sequestration began on March 1. It is likely that the contraction in Federal defense and non-defense spending, at least in part, reflects the onset of sequestration. These arbitrary and unnecessary cuts to government services will be a headwind in the months to come, and will cut key investments in the nation’s future competitiveness. The Congressional Budget Office has estimated that the sequester will reduce GDP growth by 0.6 percentage point for the year.

  • The Employment Situation in March

    While more work remains to be done, today’s employment report provides further evidence that the U.S. economy is continuing to recover from the worst downturn since the Great Depression. It is critical that we continue the policies that are helping to build an economy that creates jobs and works for the middle class as we dig our way out of the deep hole that was caused by the severe recession that began in December 2007.

    Today’s report from the Bureau of Labor Statistics (BLS) shows that private sector businesses added 95,000 jobs last month. Total non-farm payroll employment rose by 88,000 jobs in March. The February and March employment numbers were revised up by a total of 61,000 jobs. The economy has now added private sector jobs every month for 37 straight months, and a total of nearly 6.5 million jobs has been added over that period.

    The household survey showed that the unemployment rate fell from 7.7 percent in February to 7.6 percent in March, the lowest since December 2008. The labor force participation rate decreased by 0.2 percentage point to 63.3 percent in March.

  • The Third Anniversary of the Affordable Care Act

    This month marks the third anniversary of the passage of the Affordable Care Act. Provisions of the Act have already helped millions of young adults obtain health insurance coverage and have made preventive services more affordable for most Americans. When fully implemented, the law will expand coverage to an estimated 27 million previously uninsured Americans and ensure the availability of affordable coverage through traditional employer-sponsored insurance and the new Health Insurance Marketplaces (often referred to as Exchanges).

    This blog post and the accompanying report describe progress toward slowing the growth of health care costs and improving the efficiency of the health care system.

    Growth in Health Care Costs Has Already Begun to Slow

    There are signs that the Affordable Care Act (ACA) has already started to help slow the growth of health care costs and improve the quality of care through value-based purchasing programs, strengthened primary care and care coordination, and pioneering Medicare payment reforms. For each year from 2009 to 2011, National Health Expenditure data show the real rate of annual growth in overall health spending was between 3.0 and 3.1 percent, the lowest rates since reporting began in 1960.

    With the exception of a spike in 2006, the year Medicare Part D was introduced, the growth rate of Medicare spending per enrollee—a measure of health care spending intensity—has been on a downward trend since 2001, with a particularly significant slowdown over the past three years (see Figure 1). While Medicare enrollment is expected to increase 3 percent a year over the next decade, the rate of growth in spending per enrollee is now projected to be approximately the same as the rate of growth of GDP per capita, according to the CBO and Office of the Actuary at CMS.

  • Chairman Alan Krueger Speaks to the Economic Case for Commonsense Immigration Reform at the US Hispanic Chamber of Commerce

    On March 19, 2013, President Obama’s Chairman of the Council of Economic Advisers, Alan B. Krueger, delivered remarks on “The Economic Case for Commonsense Immigration Reform” at the US Hispanic Chamber of Commerce’s 2013 Legislative Summit in Washington, DC.

    Read Chairman Krueger’s Remarks HERE.

    Read the Fact Sheet on The Economic Case for Commonsense Immigration Reform HERE.

     

  • A Preview of the 2013 Economic Report of the President

    This year's Economic Report of the President describes the progress we have made recovering from the worst economic crisis since the Great Depression. After years of grueling recession, our businesses have created over six million new jobs. As a nation, we now buy more American cars than we have in 5 years, and less foreign oil than we have in 20 years. Our housing market is healing, and homeowners and consumers enjoy stronger protections than ever before. But there are still millions of Americans whose hard work and dedication have not yet been rewarded. Our economy is adding jobs, but too many of our fellow citizens still can't find fulltime employment. Corporate profits have reached all-time highs, but for more than a decade, wages and incomes for working Americans have barely budged. As President Obama has said, "A growing economy that creates good, middle-class jobs–that must be the North Star that guides our efforts."

    Although economics has long been called "the dismal science," it is more appropriately viewed as a "hopeful science." The right mix of economic policies and leadership can help a country to recover from a deep recession and point to the investments and reforms that will build a stronger, more stable, and more prosperous economy that works for the middle class. Conversely, government dysfunction or misguided fiscal policy can cause self-inflicted wounds to the economy. This year's Economic Report of the President highlights the progress that has been made in recovering from the deepest recession since the Great Depression, together with the policies that the Obama Administration is advancing to address the fundamental imbalances and threats that have built up for decades and that have created severe stress on the middle class and those striving to get into the middle class.