Week In Review
Parliament delayed voting on Johnson’s deal last Saturday, forcing him to request an extension from the EU. On Tuesday Parliament agreed in principle to Johnson’s deal but then refused to fast-track the implementing legislation in order to allow the deal to be in place on October 31. Johnson will bring a motion to have a general election on December 12, but this requires a 2/3 majority and Corbyn says that Labour will oppose the motion unless Johnson has taken a no-deal exit off the table. The EU delayed its decision on granting an extension from October 31. Macron wants to grant a short extension in order to pressure Parliament to pass Johnson’s deal, but the rest of the EU wants to grant a three-month extension.
There is a lot of uncertainty around Brexit at this point. Johnson wants either a fast vote on his deal before amendments render it unpassable or a general election. Corbyn seems hesitant to go into a general election dominated by the question of whether or not to accept Johnson’s deal. The EU is split on how much to try to pressure Parliament into passing Johnson’s deal. Right now, it is anybody’s guess as to how these issues will be resolved.
Orders for durable goods fell 1.1% in September. Orders for non-defense capital goods excluding aircraft fell 0.5%.
A large portion of the weakness in durable goods can be attributed to Boeing and their 737 Max problems. However, manufacturing clearly remains challenged and is unlikely to recover soon given the backdrop of slowing worldwide economies and continuing trade conflicts.
Chicago Mayor Lori Lightfoot released her $11.65 billion budget plan during a speech this week. Mayor Lightfoot hopes to avoid property tax increases by adding revenue in other areas. Included in the budget proposal are plans to increase revenue by changing the real estate transfer tax and adding to vehicle congestion fees.
Mayor Lightfoot and her advisors have been looking for ways to close the $838 million budget deficit and this week’s proposal gave additional details. Estimates show that the budget deficit could increase to almost $1.2 billion if no changes are made. However, the state must approve changes to the real estate transfer tax and other budget considerations. Taxpayers will be watching closely as lawmakers try to tackle the budget issues.