ECONOMIC REPORT OF THE PRESIDENT

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worked to promote innovation and invest in manufacturing workforce skills. The Administration’s commitment to manufacturing was manifested in its decision to save the automobile industry. The President made the crucial, early decision to not only rescue, but to also restructure and rebuild American automobile manufacturing and its many connected industries. Yet, support for manufacturing went beyond this rescue. Creating the Manufacturing USA initiative in 2012 marked another significant action taken to support manufacturing. The Federal Government has committed over $600 million—which has been matched by over $1.3 billion in non-Federal investment—to fund the development of world-leading manufacturing capabilities with technologies such as 3D printing, integrated photonics, and smart sensors. In the four years since its establishment, Manufacturing USA has grown from one institute with 65 members to a network of nine institutes and over 1,300 members. Further, the Administration has taken steps to reinvest in our manufacturing workforce to prepare it for a more competitive, global economy. First, the Administration awarded nearly $2 billion in Trade Adjustment Assistance Community College Career Training grants to help community colleges expand and improve programs that prepare workers for high-paying, high-skill occupations. To date, nearly 300,000 participants have enrolled in retraining programs through these grants, and 160,000 credentials have been awarded. Second, the Administration has prioritized apprenticeships. Research shows that apprenticeships tend to lead to high-paying jobs and provide a strong return on investment for employers. Recent Department of Labor data indicate that after completing her programs, the average registered apprentice earns a starting wage above $60,000, and 89 percent of registered apprenticeship program completers enter employment after exiting. To these ends, the Administration has allocated $265 million toward grants aimed at expanding apprenticeships in the United States. Since 2014, active apprenticeships have increased 31 percent, with an estimated 20,000 new apprentices in the manufacturing industry. Ultimately, U.S. manufacturing output since the Great Recession has recovered at twice the pace of the overall economy since the third quarter of 2009. This marks the longest period in which manufacturing has outpaced U.S. economic output in 50 years. Contrary to the pattern in all other U.S. expansions since 1982, the current expansion has seen an increase in manufacturing output as a share of U.S. value-added. Notably, the U.S. manufacturing sector’s job growth since the Great Recession is a marked departure from last decade, when the sector Eight Years of Recovery and Reinvestment | 39
struggled to recover the jobs lost in the 2001 recession. Since February 2010, U.S. manufacturing has added over 800,000 new jobs. Following the strong manufacturing recovery in the expansion after the Great Recession, the manufacturing sector has seen lackluster output and employment growth since 2014. The sector is inextricably tied to the global economy, and as global demand has slowed and energy-related capital expenditure has fallen, U.S. manufacturing has suffered. Global economic output, as one of the key drivers of export demand, is particularly important to manufacturing, as it is a far more trade-exposed sector than other parts of the economy. For example, while manufacturing represents roughly 12 percent of value added in the economy, manufactured exports have maintained a share of more than 60 percent of U.S. exports. Real exports rebounded swiftly after the crisis, helping the manufacturing sector. But recently, real exports of goods and services have fallen slightly, tied in large part to slower foreign GDP growth and a strong U.S. dollar. Moreover, recent declines in energy prices have affected many manufacturing industries that serve as significant upstream suppliers for the energy sector, such as steel manufacturers that supply oil producers. Yet, even despite these headwinds, manufacturing job growth over the last two years is comparable with its best two years in the previous Figure 1-ii U.S. Manufactured Goods Exports as a Share of World Manufactured Goods Exports, 1980–2015 Percent 15 14 13 12 11 10 2015 9 8 1980 1985 1990 1995 2000 2005 2010 2015 Note: Data for 2015 are preliminary CEA estimates based on scaled World Bank WDI data. Manufactured exports are defined by SITC sections 5, 6, 7, and 8 (which includes iron and steel, chemicals, machinary and transport vehicles, and textiles), but exclude division 68 (nonferrous metals) and group 891 (arms and amunition). This differs from the Census definition of manufacturing, which is based on NAICS codes 31-33. Source: World Trade Organization; IMF International Financial Statistics; Eurostat Comext; World Bank. 40 | Chapter 1
Page 1 and 2: ECONOMIC REPORT OF THE PRESIDENT To
Page 4: C O N T E N T S ECONOMIC REPORT OF
Page 8 and 9: economic report of the president To
Page 10 and 11: eforms in history. Banks have sharp
Page 12: the annual report of the council of
Page 16 and 17: C O N T E N T S CHAPTER 1: EIGHT YE
Page 18 and 19: . THE ECONOMIC RATIONALE FOR FEDERA
Page 20 and 21: 2.4. Government Purchases as Share
Page 22 and 23: 4.iii. Premium for the Benchmark Pl
Page 24 and 25: 6.18. Systemic Risk (SRISK) 2005-20
Page 26 and 27: C H A P T E R 1 EIGHT YEARS OF RECO
Page 28 and 29: Figure 1-1 Actual and Consensus For
Page 30 and 31: Figure 1-3 Real Hourly Wage Growth
Page 32 and 33: Figure 1-4 Real GDP per Capita: Eur
Page 34 and 35: Figure 1-6 Household Net Worth in t
Page 36 and 37: Figure 1-8 Global Trade Flows in th
Page 38 and 39: Subsequent revisions to fourth-quar
Page 40 and 41: Percent 6 Figure 1-9 Fiscal Expansi
Page 42 and 43: substantial costs to the Federal Go
Page 46 and 47: expansion, a period of low producti
Page 48 and 49: The 2017 Economic Report of the Pre
Page 50 and 51: Chapter 4: Reforming the Health Car
Page 52 and 53: to the ACA and other factors. The A
Page 54 and 55: than 98 percent of Americans should
Page 56 and 57: Figure 1-13 Borrowers in Income Dri
Page 58 and 59: success of the financial rescue and
Page 60 and 61: einforced U.S. leadership in the ru
Page 62 and 63: Partnership (OGP), a global partner
Page 64 and 65: Figure 1-16 Labor Productivity Grow
Page 66 and 67: Labor Force Participation Household
Page 68 and 69: number of steps to ensure that econ
Page 70 and 71: C H A P T E R 2 THE YEAR IN REVIEW
Page 72 and 73: Percent 11 Figure 2-1 Unemployment
Page 74 and 75: allowing for additional investments
Page 76 and 77: Percentage Point 0.6 0.4 Figure 2-3
Page 78 and 79: public, largely highway constructio
Page 80 and 81: The size of the Federal Reserve’s
Page 82 and 83: Figure 2-5 Private-Sector Payroll E
Page 84 and 85: fell 80 percent from September 2014
Page 86 and 87: Figure 2-8 Rates of Part-Time Work,
Page 88 and 89: Figure 2-v Prime-Age Male Labor For
Page 90 and 91: Output Real GDP grew 1.6 percent ov
Page 92 and 93: Figure 2-11 Compensation and Consum
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Table 2-i Optimal Weighting for Hou
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esults suggest that, to a first app
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Figure 2-viii Real GDP, Average and
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Figure 2-13 Consumer Sentiment and
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Figure 2-xi Household Debt Service,
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Ratio to Annual DPI 1.10 1.05 Figur
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Figure 2-17 National House Price In
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Index 220 Figure 2-19 Housing Affor
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Figure 2-21 Composition of Growth i
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Figure 2-23 Capital Services per Un
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Box 2-7: Explanations for the Recen
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Figure 2-xv Business Fixed Investme
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Figure 2-26 Foreign Real GDP and U.
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somewhat generalizable (Box 2-8), b
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prices weakened and the global econ
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inadequate demand has contributed t
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Figure 2-31 Nominal Wage Inflation
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Figure 2-33 Real Hourly Wage Growth
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Index 6 Figure 2-36 Financial Condi
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Percent 4.0 Figure 2-38 Nominal Lon
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Dollars per Barrel 80 Figure 2-40 B
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Figure 2-41 IMF World Real GDP Grow
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against the Mexican peso, the Chine
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United Kingdom It has been a turbul
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for example, Japan has grown almost
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Figure 2-45 Credit to Nonfinancial
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Meanwhile, core inflation (excludin
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kept rates low across a wide range
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Investments in surface transportati
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Table 2-2 Supply-Side Components of
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Conclusion The economy continued to
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not increased from 1973 to 2013, in
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developments; individual behavior;
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action affecting income inequality
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have occurred. In doing so, these p
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Percent 24 21 18 15 12 9 6 African
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without the policy response.5 These
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Box 3-2: Income Inequality and the
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unable to obtain insurance at any p
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Figure 3-7B Percent 50 Uninsured Ra
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and have not expanded Medicaid foun
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Box 3-3: Safety Net Policies as Ins
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Millions of People 18 Figure 3-8 Im
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Figure 3-9 Effective Tax Rates for
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Box 3-4: Additional Actions to Make
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$294 million in newly appropriated
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15 10 5 0 -5 -10 -15 Figure 3-12 Pe
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Administration with those of previo
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as a share of potential GDP by Pres
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Figure 3-17 Changes in the Distribu
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30 25 20 15 10 5 0 Single Source: C
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ate on capital gains and dividends
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C H A P T E R 4 REFORMING THE HEALT
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eneficiaries have received cumulati
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form of lower premium costs and ind
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Percent 25 20 Creation of Medicare
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Figure 4-3 Health Insurance Coverag
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90 80 70 60 50 40 30 20 10 0 25 55
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Percent Uninsured 25 CHIP Created 2
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Legislative actions subsequent to C
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Percent Uninsured 40 35 Figure 4-7
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ecause of the ACA’s provision all
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Box 4-2: Dynamics in the Individual
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projected during the debate over th
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whelming majority of Marketplace en
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Figure 4-v Change in Benchmark Prem
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20 Figure 4-10 Share of Workers in
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percent during the decade preceding
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Panel A: Share with a Personal Doct
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Box 4-3: Interpreting Results from
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Fortunately, the OHIE is not the on
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Figure 4-14 Uncompensated Care as a
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Figure 4-15 Uninsured Rate by Popul
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Figure 4-17 Monthly Gain in Private
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Change in Working-Age Employment to
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this cross-sectional relationship b
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ecent discussions of macroeconomic
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Figure 4-23 Life Expectancy at Birt
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Figure 4-24 Mortality Rate vs. Medi
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more to cover Medicare patients tha
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example, through CMMI, the Administ
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orient payment around the entirety
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Percent of Payments 60 Figure 4-26
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covered under ACO contracts at the
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Additional Steps to Reform the Heal
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legislation that overrides the reco
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Figure 4-28 Health Care Price Infla
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Figure 4-30 Trends in Real Prices f
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average growth rate of real per enr
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Figure 4-34 Growth in Real Costs fo
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made a large, readily quantifiable
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in states experiencing weaker and s
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distribution, holding fixed both sp
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individuals among individuals 65 an
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Figure 4-40 Average Real Deductible
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Figure 4-41 Real Per-Enrollee Presc
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educe the growth rate of Medicare s
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improvements will strengthen ACOs
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-5 0 -2 Figure 4-42 Cumulative Perc
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Woolhandler 2015). These analysts a
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productivity on the job. These bene
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Figure 4-46 Premiums and Cost Shari
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(KFF 2016). Another fifth of tradit
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2030 2028 2026 2024 2022 2020 2018
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C H A P T E R 5 INVESTING IN HIGHER
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Gainful Employment regulations. To
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Thousands of 2015 Dollars 900 800 7
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externalities, credit constraints,
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Figure 5-4 Earnings by Age and Educ
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Figure 5-5 Variation in Earnings by
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Box 5-1: Anti-Poverty Efforts and E
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careers. Some of the effects of the
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eligibility cutoff likewise finds s
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Box 5-2: Federal Investments in K-1
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Evaluations of early local Promise
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America’s College Promise Playboo
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Dollars 45,000 40,000 35,000 30,000
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pre-payment penalty. Second, by tyi
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equirements, pushed efforts associa
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Figure 5-16 Size of Outstanding Loa
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Figure 5-17 Average Monthly Payment
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Figure 5-18 Distribution of Key Out
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Figure 5-20 Earnings by Family Inco
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to student needs and improve test s
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Box 5-5: Making Sure Students Enter
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prior, the early FAFSA reform helps
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Figure 5-ii Number of Institutions
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Figure 5-23 Gainful Employment Earn
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Additionally, Pell Grants can be be
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C H A P T E R 6 STRENGTHENING THE F
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with no easy way to get the funds f
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public has limited information, run
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value added of the sector has gradu
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managers. Thus, after fees, savers
Page 364 and 365:
Too Many Resources in Finance? Beyo
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of the firm after the purchase affe
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Percent 100 Figure 6-2 Mortgage Ori
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Figure 6-4 Case-Shiller Home Price
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Figure 6-7 Global OTC Derivative Ma
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consumer and investor protections.
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Figure 6-iv Top 5 Banks as Share of
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cult to replace with services from
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Are U.S. Banks Too Big? The questio
Page 382 and 383:
The three federal banking agencies
Page 384 and 385:
Risk Taking The Dodd-Frank Act took
Page 386 and 387:
Box 6-3: The Performance of Communi
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Figure 6-ix Return on Assets of Ban
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egulators can take a more holistic
Page 392 and 393:
Figure 6-13 Repo and Reverse Repo,
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Figure 6-15 Private Funds Reporting
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Days 60 Figure 6-16 Weighted-Averag
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Figure 6-18 Systemic Risk (SRISK),
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In the absence of another financial
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lower funding costs in 2007-09, “
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through the Dodd-Frank Act and othe
Page 406 and 407:
Prior to the financial crisis, one
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asis.24 One of the advantages of ce
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findings from the NRSRO examination
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Prior to the crisis, enforcement of
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Box 6-5: Addressing the Problem of
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Table 6-i Sources of Investment Adv
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financial system and the systems of
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Box 6-6: The JOBS Act While it was
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Figure 6-23 S&P 500, 2003-2016 Inde
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Figure 6-27 Mortgage Delinquency an
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It created the FSOC to consider ris
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energy efficient and lower greenhou
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of domestic actions to reduce green
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people and vegetation (U.S. Global
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investment are much higher than the
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Delaying Action on Climate Change I
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uses and land management activities
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Carbon Pollution Standards for Powe
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a projected range of $16 billion to
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these resulted in insignificant cha
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Figure 7-4 Corporate Average Fuel E
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diesel fuel and jet fuel. The Vehic
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Box 7-3: Building Resilience to Cur
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sources in the oil and gas sector,
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emissions and total greenhouse gas
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Figure 7-7 Energy Intensity of Real
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Figure 7-10 U.S. Petroleum Consumpt
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Figure 7-12 Energy Intensity Transp
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Figure 7-14c Energy Intensity Comme
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Figure 7-16 U.S. Energy Consumption
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2008 to 7 percent in 2015. Figure 7
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Index, 2008 =0 0.1 0.0 -0.1 Figure
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Figure 7-23 Decomposition of Emissi
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three determinants of emissions? If
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Percent 100 80 Figure 7-26 Sectoral
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characteristics, and management tre
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oil and gas sector) were subsequent
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while creating new jobs and raising
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such as using similar methodologies
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Box 7-4: Supporting Increased Penet
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sector, the fee would incentivize p
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to be used to decompose emissions i
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Reinvestment Act.” NBER Working P
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D’Amico, Stefania, et al. 2012.
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______. 2016. “Chapter 3: Develop
Page 497 and 498:
Chetty, Raj, et al. 2014. “Where
Page 499 and 500:
NBER Working Paper 22170. Cambridge
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American Hospital Association and H
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Cantor, Joel C., et al. 2012. “Ea
Page 505 and 506:
______. 2012a. “Direct Spending a
Page 507 and 508:
Dranove, David, Craig Garthwaite, a
Page 509 and 510:
Wars: Global Solutions for Developi
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Huang, Jidong, and Frank J. Chaloup
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McWilliams, J. Michael. 2016. “Ch
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Pinkovskiy, Maxim. 2014. “The Imp
Page 517 and 518:
______. 2016. “Certification of M
Page 519 and 520:
Arcidiacono, Peter, V. Joseph Hotz,
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Bulman, George, and Caroline Hoxby.
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______. 2015a. “Economic Costs of
Page 525 and 526:
Dobbie, Will, and Roland G. Fryer J
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Committee on Health, Education, Lab
Page 529 and 530:
Jepsen, Christopher, Kenneth Troske
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Marcotte, Dave E., et al. 2005. “
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Reynolds, Arthur J., et al. 2011.
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Chapter 6 Acharya, Viral. V., Deniz
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Fama, Eugene F., and Kenneth R. Fre
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Wheelock, David C., and Paul W. Wil
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______. 2016a. “The Economics of
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______. 2016c. Short Term Energy Ou
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Interagency Working Group on the So
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Office of Management and Budget (OM
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A P P E N D I X A REPORT TO THE PRE
Page 553 and 554:
Council Members and Their Dates of
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Report to the President on the Acti
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consulting with a wide variety of o
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In October, the Council released a
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Research Economists David Boddy . .
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A P P E N D I X B STATISTICAL TABLE
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GOVERNMENT FINANCE, INTEREST RATES,
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Year or quarter Table B-1. Percent
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Table B-2. Gross domestic product,
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Table B-3. Quantity and price index
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Table B-5. Real exports and imports
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Year Total Table B-7. Real farm inc
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Table B-9. Median money income (in
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Labor Market Indicators Table B-11.
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Year or month Table B-12. Civilian
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Table B-14. Employees on nonagricul
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Year or month Table B-15. Hours and
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Government Finance, Interest Rates,
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Table B-19. Federal receipts and ou
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Table B-21. Federal and State and l
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Table B-23. U.S. Treasury securitie
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Year and month Bills (at auction) 1
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Year and month Table B-26. Money st
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