Mosler Economics

Last month’s downward revision and the drop in permits make this report particularly negative. Again, looks like housing will be a drag on growth this year vs last year: Still trending from bad to worse: With the govt a net payer of interest, rate cuts reduce total interest income for the economy by that amount. But some of the effects are lagged, as indicated below, and are therefore still ongoing, as lower pension returns often result in higher contributions and lower...

It looks like the SNB (Swiss National Bank- the central bank) has been building $ reserves faster than euro reserves, which has worked to support the $ vs the euro. That is, when they were buying euro to keep their currency down they were selling quite a few of those euro for $ to keep their portfolio ‘balanced’. And for the last two quarters reported below, $ holdings went up about 12.5 billion while euro holding fell by about 4 billion, which means the shifting is...

A bit less than expected- nothing to cause the Fed to be alarmed. You’d think that by now they’d realize that all that rate cutting and so called ‘money printing’ has nothing to do with the price level or ‘accommodation’…: Highlights Price pressures evident the last two months down the supply chain are not yet appearing in consumer prices where the CPI rose only 0.2 percent in June for a weak year-on-year rate that is not going in the right direction, at plus 1.0 percent vs...

It was previously noted that Treasury revenue was down, which now is confirmed in this report. This is the beginning of the automatic fiscal stabilizers at work, where weakness translates intoa larger federal deficit, and persists until deficit spending is sufficient to more than offset unspent income, as is necessary for growth. Private sector deficit spending would also restore growth. However I see only private sector credit growth deceleration, which is generally the...

A few weeks ago I posted the announcement of Saudi price cuts, suggesting this could be meant to bring down prices, which now seems to be happening: Again, with no loan demand, they are calling for higher rates, presumably to slow down lending: Six Fed banks called for discount rate hike: minutes By Lindsay Dunsmuir July 12 (Reuters) — The number of regional Federal Reserve banks pushing the central bank to raise the rate it charges commercial banks for emergency loans rose...

Unchanged from last week as modest growth from very low levels continues: The seasonally adjusted Purchase Index was unchanged from one week earlier. The unadjusted Purchase Index decreased 20 percent compared with the previous week and was 5 percent lower than the same week one year ago. Last year, the Fourth of July fell on the prior week.Read more at http://www.calculatedriskblog.com/#sQ3JkrmqGOvif9t3.99 So now that they know larger deficits are better for an economy, why...

Up a bit, but still weak and in a downtrend, and employment declining: HighlightsThe small business optimism index rose 0.7 points in June to 94.5, the third monthly increase since falling to a 2-year low in March. The improvement in small business optimism slightly exceeded expectations, though the index remains in the downtrend in place since the 100.4 recovery peak set in December 2013 and below the 42-year average of 98. Four of the 10 components of the index posted...

Not good: Not a good sign when tax revenue growth decelerates like this:

Still decelerating on a year over year basis: United States Consumer Credit ChangeConsumer credit in the United States increased by $18.56 billion in May 2016 following a downwardly revised $13.4 billion rise in April and above market expectations of a $16 billion gain. This was decelerating and below stall speed when the boom in oil capex reversed that trend early in 2014. Then in late 2014 oil capex collapsed and bank lending growth reversed and resumed its deceleration:...

Nice rebound as Verizon workers return to work, but the year over year deceleration continues and, of course, this number will be revised next month. And the lower average hourly earnings gains could put off fears of the US turning into Zimbabwe and Weimar for several hours: The payroll gain in June is what is striking in this report. Yet smoothing the big ups and downs, second-quarter payroll growth averaged a monthly 147,300 vs a more substantial 195,700 in the first...