Council of Economic Advisers Blog

  • Chairman Alan Krueger Discusses “The Economic Case for a Balanced Approach to Fiscal Policy” at the 2013 NABE Economic Policy Conference

    At 11:45 am ET on Tuesday, March 5, 2013, President Obama’s Chairman of the Council of Economic Advisers, Alan B. Krueger, delivered remarks on “The Case for a Balanced Approach to Fiscal Policy” at the 2013 NABE Economic Policy Conference in Washington, DC.

    In his prepared remarks, Chairman Krueger said: "… a balanced approach to deficit reduction is good economic policy, justified by considerations of both efficiency and fairness.  Deficit reduction that balances spending cuts, entitlement reform and loophole closing is also in the interest of the macroeconomy and economic growth.  Economists should reject the position that says no revenues can be raised from closing unjustified tax loopholes in order to finish the job of stabilizing our finances and strengthening our economy.”

    Click here to see Chairman Krueger’s remarks and charts used.

  • Open for Questions: The State of the Union and the Economy

    Today, Alan Krueger, Chairman of the Council of Economic Advisers, answered questions from the public about President Obama's State of the Union Address in an “Open for Questions” session moderated by Yahoo! Finance. Check it out below.

  • The Employment Situation in January

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

    Today’s report is a reminder of the importance of the need for Congress to act to avoid self-inflicted wounds to the economy.  The Administration continues to urge Congress to move toward a sustainable Federal budget in a responsible way that balances revenue and spending, and replaces the sequester, while making critical investments in the economy that promote growth and job creation and protect our most vulnerable citizens.

    With today’s release, the Bureau of Labor Statistics has finalized its benchmark adjustment, and the latest data show that the economy has now added private sector jobs for 35 straight months, and a total of 6.1 million jobs have been added over that period. In 2012, private businesses added 2.2 million payroll jobs.  The first report of private sector job growth for January is that businesses added 166,000 jobs. Total non-farm payroll employment rose by 157,000 jobs last month. The average first report of monthly job growth in 2012 was 142,000, that is now revised to 181,000 jobs per month.

  • Advance Estimate of GDP for the Fourth Quarter of 2012

    According to the “advance” estimate released by the Bureau of Economic Analysis today, real GDP edged down 0.1 percent at an annual rate in the fourth quarter of 2012, amid signs that Hurricane Sandy disrupted economic activity and Federal defense spending declined precipitously, likely due to uncertainty stemming from the sequester.  This was the first quarterly drop in real GDP in three-and-a-half years (see first chart below). Over the last fourteen quarters, the economy has expanded by 7.5 percent overall, and the private components of GDP have grown by 10.9 percent. During the four quarters of 2012, real GDP grew by 1.5 percent, the third consecutive year of economic expansion.  Over this period, real GDP growth has been led by an expansion in the private sector (see second chart below). 

    Several private sector components of GDP continued to make positive contributions to growth in the fourth quarter.  Personal consumption expenditures, the single largest component of GDP, increased by 2.2 percent at an annual rate in 2012:Q4, as compared with 1.6 percent in the previous quarter. Residential investment grew by 15.3 percent last quarter and has increased for seven consecutive quarters, the longest streak since 2004-2005. Business investment in equipment and software grew at its fastest pace in more than a year, rising 12.4 percent.

    Federal defense purchases declined at an annual rate of 22.2 percent in the fourth quarter of 2012, the largest quarterly decline in 40 years.  A likely explanation for the sharp decline in Federal defense spending is uncertainty concerning the automatic spending cuts that were scheduled to take effect in January, and are currently scheduled to take effect on March 1st. The decline in government spending across all levels reduced real GDP by 1.33 percentage points in the quarter. 

  • The Employment Situation in December

    While more work remains to be done, today’s employment report provides further evidence that the U.S. economy is continuing to heal from the wounds inflicted by the worst downturn since the Great Depression. It is critical that we continue the policies that are building an economy that 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.

    With the passage of the American Taxpayer Relief Act earlier this week, more than 98 percent of Americans and 97 percent of small businesses now have certainty that their income taxes will not rise. Additionally, unemployment insurance was extended for two million Americans who are searching for a job, and companies will continue to receive tax credits for the research that they do and continue to have tax incentives to accelerate investment in their businesses. By allowing income tax cuts for the top two percent of earners to expire, this legislation further reduces the deficit by $737 billion over the next decade. It is important that we continue to move toward a sustainable federal budget in a responsible way that balances revenue and spending while protecting critical investments in the economy and essential support for our most vulnerable citizens.

    Today’s report from the Bureau of Labor Statistics (BLS) shows that private sector businesses added 168,000 jobs in December. Total non-farm payroll employment rose by 155,000 jobs last month. The economy has now added private sector jobs for 34 straight months, and a total of 5.8 million jobs have been added over that period, taking account of the preliminary benchmark revision. In 2012, private businesses added two million payroll jobs, taking account of the preliminary benchmark revision.

  • The Employment Situation in November

    While more work remains to be done, today’s employment report provides further evidence that the U.S. economy is continuing to heal from the wounds inflicted by the worst downturn since the Great Depression. It is critical that we continue the policies that are building an economy that 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. 

    Most pressing, President Obama has proposed, and the Senate has passed, an extension of middle class income tax cuts that would prevent the typical middle class family from facing a $2,200 tax increase at the beginning of next year. In addition, the President has proposed a plan that will enable responsible homeowners to refinance their mortgage and take advantage of today’s historically low interest rates. To create more jobs in particularly hard-hit sectors, President Obama continues to urge Congress to pass elements of the American Jobs Act, including further investment in infrastructure to rebuild our Nation’s ports, roads and highways, and assistance to State and local governments to prevent layoffs and to enable them to rehire hundreds of thousands of teachers.

    Today’s report from the Bureau of Labor Statistics (BLS) shows that private sector businesses added 147,000 jobs last month. Total non-farm payroll employment rose by 146,000 jobs in November. The economy has now added private sector jobs for 33 straight months, and a total of 5.6 million jobs have been added during that period, taking account of the preliminary benchmark revision.

    The household survey showed that the unemployment rate declined from 7.9 percent in October to 7.7 percent in November, the lowest since December 2008. The labor force participation rate declined by 0.2 percentage point last month. Over the last 12 months, the unemployment rate has decreased by 1.0 percentage point as a result of growing employment, and the labor force participation rate has been essentially unchanged.