Mosler Economics

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...

U.S. business conditions strongest since 2014 (Reuters) U.S. business conditions are the strongest since the summer of 2014 as sentiment has recovered from a weak start to the year, signaling companies’ willingness to make capital expenditures, Morgan Stanley economists said. The bank’s business conditions index rose 3 points to 68 in April, the highest since August 2014. The index is more than double its recent trough of 29, hit in February. The bank’s hiring plans index fell 13 points in...

Confirms what had to be the case as a simple point of logic. Saudis set price and let quantity adjust: Saudi Arabia is producing below its potential capacity because it only responds to demand, the prince said. “If we produced more oil than there is demand, we would destroy many markets. So we consider supply and demand, and we look at any demand we receive and we deal with it.” Less then expected and trending lower: Consumer SentimentHighlightsA week of mostly weak economic data ends on...

Serious setback, worse than expected and last month revised down as well. Look for more Q1 GDP reductions: Industrial Production From the Fed: Industrial production and Capacity UtilizationIndustrial production decreased 0.6 percent in March for a second month in a row. For the first quarter as a whole, industrial production fell at an annual rate of 2.2 percent. A substantial portion of the overall decrease in March resulted from declines in the indexes for mining and utilities, which...

Lowest leve of new jobless claims ever on a per capita basis. Yet U6 unemployment remains near the highs of the prior recession. Leads me to suspect the reason for the low claims is they’ve become a lot harder to get, shutting off an automatic fiscal stabilizer, as previously discussed:Nothing exciting happening from this point of view, either. The large year over year gains were only due to the large spike followed by a several month dip last year: Rail Week Ending 09 April 2016: The Data...

A bit of an increase after a dip, but still low and still depressed, as per the chart. And spikes up like this have most often subsequently reversed: MBA Mortgage ApplicationsHighlightsDriven by falling interest rates, mortgage application activity was brisk in the April 8 week both for home purchases, up 8.0 percent, and refinancing, up 11.0 percent from the previous week. Purchase applications are up a striking 24 percent from this time last year, attaining the second highest level since...

When this we going up a bit it made headlines. Now when it’s flashing recession it doesn’t: NFIB Small Business Optimism IndexHighlightsSmall business owners remain pessimistic, with the small business optimism index dipping another 0.3 points in March to 92.6, surpassing February’s two year low and remaining well below the 42-year average of 98. Four of the 10 component indices posted a gain and six posted declines. Among the most optimistic parts of the index, plans to increase capital...

Contributions reduce aggregate demand: US faces ‘disastrous’ $3.4tn pension funding hole (FT) — The US public pension system has developed a $3.4tn funding hole. The collective funding shortfall of US public pension funds is three times larger than official figures showed. Joshua Rauh, a senior fellow at the Hoover Institution, who carried out the study, said: “The pension problems are threatening to consume state and local budgets in the absence of some major changes. Currently, states and...

Here we go- the inventory liquidation looks to be underway in earnest. Again, sales also fell, so the inventory to sales ratio remains at a still very high 1.36%. Look for more downward revisions to Q1 GDP: Wholesale TradeHighlightsWholesalers aggressively drew down their inventories in February, 0.5 percent lower following a revised 0.2 percent draw in January. Auto inventories were worked sharply lower in February, down 1.0 percent for the largest monthly decline since September...