Wages and salaries rose in January by 0.4 percent—up 5 percent from last year—but that extra money has yet to leave consumers' pockets and get back into the economy. Other good economic news was released yesterday, too: Filings for unemployment benefits are at a four-year low. Usually, when wages rise, consumer confidence also goes up, giving the economy a big boost. That hasn't happened yet this time.
Although the past few months have brough economic data that hints at recovery, one important statistic hasn't improved: housing prices. The Standard & Poors/Case-Shiller index of property values report of 20 U.S. cities released yesterday shows that national housing prices have dropped to their lowest levels since 2002. “It is hard to get entirely enthusiastic about the recovery when housing prices are still falling,” said Mark Zandi, the chief economist at Moody’s Analytics. In December, the index decreased by 4 percent from a year earlier, and Detroit was the only city to see an increase from 2010.
After the Obama administration halted progress on the Keystone XL pipeline in January—stating that the 60-day window of time permitted by Republican legislators was too small for a thorough environmental review—those against the proposal cheered and hoped the pipeline was dead.
States have been slow to create the health-insurance exchanges mandated by the Affordable Care Act, most likely because of recalcitrant governors waiting to hear the Supreme Court's decision on whether the law is constitutional. The Urban Institute, a think tank, has found that only 14 states have made significant progress in creating the government-subsidized exchanges while 16 had made little or no progress. The study also showed that the states that have been slowest to move have the most uninsured residents.