Mosler Economics

Continues at depressed levels: MBA Mortgage ApplicationsHighlightsPurchase applications are not pointing to Spring acceleration for the housing sector, down 2.0 percent from the April 22 week with the year-on-year rate continuing to come down, to 14 percent from 17 percent. This rate was as high as 30 percent as recently as March. Refinancing activity also declined, down 5.0 percent in the week. Rates remain very low with the average 30-year mortgage for conforming loans ($417,000 or less)...

Not good.Note the year over year change.And inventories remain way high: Durable Goods OrdersHighlightsThe factory sector posted a respectable March with orders for durable goods up 0.8 percent which follows a revised downswing of 3.1 percent in February and a very solid 4.3 percent gain in January. March reflects a big gain for defense goods which helped offset a downward swing for commercial aircraft. A negative in the report is a 3.0 percent decline for motor vehicle orders reflecting...

Still weak and worse than expected. And prices weakening as well: New Home Sales HighlightsGrowth in new homes isn’t spectacular but, given how soft general economic conditions are, the sector is posting moderate and still respectable numbers. March sales came in at a 511,000 annualized rate which is on the low side of expectations but the report includes a 7,000 upward revision to 519,000 for February which now stands as among the very best months since 2008. Year-on-year, sales are up 5.4...

Loan growth remains uninteresting:And now real estate loan growth, which wasn’t much to begin with, is showing signs of leveling off: In case you thought today’s macro policies were some kind of gift to banks: Again, wouldn’t surprise me if revisions in coming years show the US has been in recession since not long after oil prices got low enough for capex to collapse. And it’s an old fashioned ‘under consumption theory’ slowdown- any agent that spent less than his income needed to be...

More bad stuff: PMI Manufacturing Index FlashHighlightsEarly indications on April factory conditions are no better than mixed with strength in the Empire State report offset by yesterday’s flat readings from the Philly Fed and another set of flat readings from today’s PMI flash. The PMI, at 50.8, is still over 50 to indicate monthly growth but is the least above 50 since the beginning of the recovery, in September 2009. Growth in both output and hiring is slowing as is growth in new orders...

Whoops, back down: Philadelphia Fed Business Outlook Survey Same here: Chicago Fed National Activity Index If this is indeed falling because benefits have been made that much harder to get it means this channel of increased govt expenditures is disabled, and the cycle will get that much worse before it gets better: Jobless ClaimsHighlightsThe labor market once again, against a background of soft data, shows itself as the economy’s leading positive. Initial claims fell 6,000 in the April...

Off to a slow start this year:Dropped again:Does the Fed care about it’s internal index?Israeli study: How Information Graphics Reveal Your Brain’s Blind Spots Houston airport: Passengers were complaining about the inordinately long time they had to wait to pick up their bags. The airport decided to look more closely at the baggage collection process. They found that passengers typically got off an airplane, walked for about a minute from the gate to the baggage claim carousels, then...

You can see from the chart this is not any kind of ‘engine of growth’ at this point in time: Existing Home SalesHighlightsExisting home sales rose more than expected in March, up 5.1 percent to a 5.330 million annualized rate that, however, fails to reverse a downwardly revised 7.3 percent drop in February. And the year-on-year rate, at only 1.5 percent, is decidedly weak. But looking at the first quarter as a whole, which is important for housing data given their volatility, existing home...

3 out of top 4 stories not looking good:Global trade still in contraction and larger foreign surpluses most often imply larger US deficits: Japan Trade Surplus Largest in Over 5 Years Japan recorded a 754.9 JPY billion surplus in March of 2016, widening sharply from a 223.47 JPY billion surplus a year earlier but below market consensus. It is the largest surplus since October 2010 as exports fell 6.8% yoy while imports dropped by 14.9%.

Starts and permits down and below expectations. I see this as removing any hope of any kind of sustainable growth. The traditional sources of private sector credit expansion- housing, vehicles, and general investment are continuing to decelerate when acceleration is needed just to replace the capital expenditures that were being generated by $100 oil. And even then GDP growth was modest, at best. United States : Housing StartsHighlightsData on the housing sector are slowing going into the...