Publications

The Wall Street Journal reports that U.S. household net worth climbed $2.3 trillion to a new peak of $94.8 trillion in the first quarter of 2017.  The increase was largely driven by gains in stock valuations and home prices, which added $1.3 trillion and $500 billion, respectively. WSJ

The House of Representatives yesterday passed the Financial Choice Act, a piece of legislation aimed at rolling back many of the financial regulations put in place after the recent recession. Although the bill passed the House it is expected to receive stiff resistance in the Senate where the Republican party holds only a slim majority. WaPo

Sam Fleming of the Financial Times writes that U.S. employers are having an increasingly difficult time finding skilled workers, which should drive increases in wages and inflation.  Although inflation and job growth have been muted in recent months, increasing wage pressures could in turn support the two additional Federal Reserve rate hikes expected this year. FT

The Wall Street Journal reports that President Trump is expected to outline his administration’s new worker-training initiatives next week.  The initiatives are expected to include expanded vocational training and apprenticeship programs designed to address the skills gap that has developed in the American labor force. WSJ

The Wall Street Journal reports that the U.S. has doubled its oil exports so far this year, signaling the resurgence of the American oil industry.  Even though American exports still only make up roughly 1% of global volumes, recent OPEC production cuts coupled with advancing technologies have allowed companies to profit at ever-lower prices. WSJ
 
A new study argues that roughly three million first-time home buyers have been shut out of the housing market over the last ten years.  The authors point to tight lending standards and significant supply shortages as key drivers of this trend, which has shown some signs of abating in recent months. WSJ

The Job Openings and Labor Turnover Survey (“JOLTS”), a closely watched measure of labor market health, indicated there were 6.0 million job openings at the end of April, the highest reading ever.  Hires decreased to 5.1 million and the quits rate was little changed at 2.1%.  BLS Report

The Wall Street Journal reports that the median new U.S. home got smaller last year for the first time since the Great Recession of 2008-09.  Experts say that the decline can be traced to high demand from first time buyers and persistently low supply, which has driven builders to construct smaller, more affordable homes. WSJ

Sam Fleming and Robin Wigglesworth of the Financial Times write that the fact that recent Fed rate hikes have had little effect on financial markets may strengthen the case for another rate hike in June. While recent, weak employment and muted inflation would usually decrease the likelihood of a rate hike, Fed officials have argued that these factors are only transitory and strong financial markets point to the general health of the economy. FT

Josh Zumbrun of the Wall Street Journal writes that past instances in which the unemployment rate was as low as it is today usually have led to serious economic crises.  While Zumbrun notes that the U.S. economy does not appear to be at risk of overheating at the moment, exceptionally low unemployment may cause inflation to spike later this year. WSJ