ECONOMY WEEKLY: WEEK OF MAY 10, 2010

“Amid complaints about high taxes and calls for a smaller government, Americans paid their lowest level of taxes last year since Harry Truman's presidency, a USA TODAY analysis of federal data found.”
– USA Today, 5/11/2010

Economy Highlights:

• The Department of Labor reported that new claims for jobless benefits declined last week, another indication that the U.S. economy continues to show signs of improvement. “Employers, encouraged by a recovering economy, are hiring again.... The Labor Department said Thursday that initial claims dropped last week by 4,000 to a seasonally adjusted 444,000.” [Associated Press, 5/13/2010]

• The Department of Labor reported that more workers quit their jobs in March than were laid off, “the second month in a row this has occurred and a sign of employees' growing confidence that more positions are becoming available in a slowly recovering job market. Nearly 1.9 million employees quit in March compared with more than 1.8 million who were laid off or discharged, the Labor Department said Tuesday. Meanwhile, the number of hires rose to a seasonally adjusted 4.2 million in March from 4 million in February. February marked the first month since November 2008 that the number who quit exceeded the number who were laid off or discharged.”   [Wall Street Journal, 5/12/10]

• The Department of Commerce reported that the U.S. trade deficit widened in March, indicating that demand for goods is up, fueled by – and an encouraging indicator of – economic recovery.  “The deficit expanded 2.5% to $40.4 billion in March, compared with the prior month, the Commerce Department said Wednesday. That is the deficit's highest level since December 2008. The rise in exports and imports was a positive indicator for U.S. demand, as well as for international trade, as more economies around the world recover from the downturn.” [Wall Street Journal, 5/12/2010]

 

 

Recovery Highlights:

• The Bureau of Economic Analysis reported that Americans paid lower taxes in 2009 than any year since 1950, due in large part to the tax cuts accounting for one-third of Recovery Act funding.  “Federal, state and local taxes — including income, property, sales and other taxes — consumed 9.2% of all personal income in 2009, the lowest rate since 1950…. That rate is far below the historic average of 12% for the last half-century. The overall tax burden hit bottom in December at 8.8.% of income before rising slightly in the first three months of 2010…. One-third of last year's $862 billion economic stimulus went for tax cuts. Biggest reduction: The Making Work Pay tax credit reduced income taxes $800 for married couples earning up to $150,000.”  [USA Today, 5/14/2010]

• Vice President Joe Biden congratulated Navistar Modec Electric Vehicle Alliance at Navistar International Corporation this week, for being the first Recovery Act recipient to deliver an electric vehicle using the advanced battery and electric drive grant awards made last year.  Navistar plans to use Recovery Act funding to develop and deploy 400 of these electric vehicles and create sixty jobs in the process. “President Obama announced the more than forty awards, including $39.2 million in funding to help Navistar develop and deploy advanced battery electric delivery trucks, at the company’s Wakarusa, Indiana facility last August.  The electric truck Navistar unveiled today is the first of 400 it eventually plans to build thanks to the Recovery Act and is powered by an advanced battery manufactured in Michigan by another Recovery Act recipient, A123 Systems.”  [White House, 5/13/10; click here for additional information]