Policy: Economy

The week ahead in economics: Looking back at early 2014, staffing the Fed and housing reform

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Paul Ryan,PennAve,Joseph Lawler,Economy,Federal Reserve,Fannie Mae and Freddie Mac,Janet Yellen,GDP

The week ahead will be an important one both for looking back at what’s happened to the economy so far in 2014 and for learning about what’s in store for the rest of the year.

Releases of the two biggest economic indicators should shed light on the strength of the economy through the early part of the year.

On Wednesday, the Bureau of Economic Analysis will release the advance estimate of gross domestic product -- total economic output -- for the first quarter of the year. Following mixed news about the strength of relative sectors, including disappointing numbers regarding the housing market, analysts have dropped their expectations for growth to about 1 percent, on a yearly basis, down from 2.6 in the fourth quarter of 2013.

Most government and bank analysts think that growth nevertheless will speed up during the year, but starting off the year with 1 percent growth would make it difficult for the country to achieve the 3-plus percent growth for the year that policymakers such as Federal Reserve Chairwoman Janet Yellen envisioned (GDP estimates, however, are subject to significant revisions, which will be released in the next two months).

Then the April jobs report is due from the Bureau of Labor Statistics on Friday morning. After the March release showed 192,000 new jobs, investors expect this week's update to indicate that the number crept above the 200,000 mark. While that number would be slightly above the post-recovery average, it would also be evidence that there is not going to be a spring bounce-back from the winter weather that some analysts thought was disguising strong underlying labor market growth in the early months of the year.

The Fed's monetary policy committee members won't have the aid of knowing the jobs numbers when they meet on Tuesday and Wednesday to review the central bank's plans for its quantitative easing and near-zero interest rate programs. But analysts expect Janet Yellen and company to continue to reduce the size of the Fed's monthly bond purchases, by another $10 billion to $45 billion, while leaving its guidance for low rates unchanged.

Yellen also will speak at a community banking convention in Washington on Thursday.

The Fed's Board of Governors is currently understaffed, but the Senate Banking Committee will hold a vote to approve two new Obama nominees on Tuesday. One, Stanley Fischer, has been the head of Israel's central bank, a Citigroup executive, a top official at the World Bank and the International Monetary Fund, and a prominent academic at the Massachusetts Institute of Technology. The other, Lael Brainard, served in Obama's Treasury Department. The panel also will vote on the renomination of Jerome Powell, who has been a Fed governor since 2012. If approved, the candidates face a vote in the full Senate before being installed.

In the same meeting, the committee will mark up the bipartisan bill to close down the bailed-out government-sponsored mortgage enterprises Fannie Mae and Freddie Mac and overhaul the housing finance system. Although any measure faces long odds of being passed this Congress, the Senate bill will likely be the benchmark for legislative efforts in the medium term.

On Wednesday morning, House Budget Committee Chairman Paul Ryan will hold another hearing on the War on Poverty, this one featuring Robert Woodson, an anti-poverty social activist who is one of Ryan's mentors.

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