Mosler Economics

Still extremely depressed:Down and well below expectations: HighlightsWeakness in orders and employment were unfortunate themes of last week’s Empire State and Philly Fed reports and likewise headline the manufacturing PMI report. The PMI, which is based on a nationwide sample of manufacturers, slowed by 8 tenths in the August flash to 52.1, a reading only modestly above breakeven 50 to indicate no more than limited expansion in composite activity. Output is the month’s best...

Stephanie Kelton #1, Pavlina Tcherneva #4!http://theweek.com/articles/643874/hillary-clintons-economic-dream-team Up a bit for the month, but the 3 month moving average remains negative:

Accelerated with the shale boom, still decelerating with the shale bust: Problem is incentives to not spend income, as below, reduce sales, output, and employment. That is, they’ve got it backwards if the goal is increased GDP etc. Japan mulls longer-term tax break for savers Aug 18 (Nikkei) — The Japanese government plans to offer a new option for tax-free investment accounts featuring a much longer exemption. More than 10 million of the so-called NISA accounts were opened...

Still looks to me like this is perhaps the most misunderstood statistic, as analysts believe it is signaling strength in the labor markets. Instead I’m suggesting claims are extraordinarily low because the unemployment benefits have become much harder to get: Even with a much higher population and labor force, and with a higher unemployment rate,new claims are at 40 year lows: Not at all good: HighlightsOnce again the Philly Fed’s headline tells an entirely different story...

The chart shows both how depressed the mortgage market is historically as well as how it’s been deteriorating over the last several months: And lots of headlines like this popping up: Wednesday, August 17, 2016Sacramento Housing in July: Sales down 7%, Active Inventory down 10% YoYLas Vegas Real Estate in July: Sales down 10% YoY, Inventory down 1% Read more at http://www.calculatedriskblog.com U.S. companies’ stock buyback plans hit four-year low: TrimTabs Aug 16...

Lots of nuances but still tending to keep the Fed on hold: HighlightsThe headlines for the consumer price report look very soft but there are important offsetting pressures. The CPI came in unchanged in July, pulled back by a 1.6 percent monthly decline in energy prices and other weakness including flat prices for food and contraction in transportation. And it doesn’t look much better when excluding food & energy where the gain for the core is only 0.1 percent. But two...

Just another bit of bad news: HighlightsThe New York region’s manufacturing sector remains flat based on the Empire State index which came in slightly below zero at minus 4.21 in August vs plus 0.55 in July. New orders are especially flat, at plus 1.04 vs July’s minus 1.82, with unfilled orders extending a long run of negative readings at minus 9.28. There is, however, strength in shipments, at 9.01, but it won’t last long given the weakness in orders. Employment is also...

Still decelerating ever since the collapse in oil capex:

Nothing here to get the Fed concerned about inflation: Not good, less then expected and excluding autos, a ‘core reading’ even worse. Seems to me that perhaps the higher gas prices that caused the increases over the last couple of month’s have taken their toll on other spending. And at the macro level, without an increase in either private or public deficit spending top line growth won’t be there: HighlightsConsumers spent their money on vehicles in July but not on much else...

The euro area trade surplus in general seems to be continuing, even as global trade weakens. Fundamentally this removes net euro financial assets from global markets that were sold by portfolio managers. Those managers include central bankers proactively selling their euro reserves over the last two years or so to buy US dollars, which has in turn kept the euro low enough to drive the surplus: