By: Scott J. Brown, PH.D., Raymond James
Spending, Deficits, and Debt – On Monday, the Treasury Department is expected to report a March budget deficit of about $658 billion, bringing the 12-month total to nearly $4.1 trillion, about 19% of GDP. Proponents argue that the added spending, with more to come, will help to ensure the recovery. Critics charge that it’s overkill, likely to push aggregate demand ahead of supply. The debate over infrastructure spending will amplify these divisions.
This Week – The March CPI report should show a year-over-year gain of around 2.4%, reflecting “base effects” (a rebound from the low figures of a year ago, as the CPI fell 0.3% in March 2020) – nothing to worry about. The March reports on retail sales, industrial production, and residential construction should each show a strong rebound from the effects of February’s bad weather.