ECONOMIC REPORT OF THE PRESIDENT

Figure 2-2
Oil and Commodity Prices, 2014–2015
Index (Jun-2014=100)
120
100
80
Non-Energy
Commodities
Dec-2015
60
40
Oil
20
0
Jan-2014 Jul-2014 Jan-2015 Jul-2015 Jan-2016
Note: Displayed oil price is the Brent average monthly spot price.
Source: Energy Information Administration; Financial Times; Standard & Poor's.
Policy Developments
Fiscal Policy
Fiscal restraint in the United States continued in fiscal year (FY) 2015
with the Federal budget deficit falling 0.3 percentage point to 2.5 percent
of GDP, the lowest level since 2007 and below the average over the last 40
years. The deficit as a share of GDP has fallen by about three-fourths since
2009, the most rapid six-year deficit reduction since the demobilization
after World War II (Figure 2-3). The additional deficit reduction in 2015
was through automatic stabilizers, such as the increase in tax collections as
income rises, and was much less severe than the 1.9 percentage point a year
decline in the deficit-to-GDP ratio during the three preceding years when
changes in tax or spending policy were the primary driver.
The two-year Bipartisan Budget Act of 2013, passed in December
2013, helped provide fiscal-policy stability during FY 2014 and FY 2015.
Since that time, a series of agreements—most recently the Bipartisan Budget
Act of 2015—have avoided a Federal shutdown, partly relieved automatic
Federal spending cuts known as sequestration, and relaxed the Federal debt
limit. Government purchases, including consumption and gross investment,
at the Federal as well as State and local levels, added modestly to overall
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