Mosler Economics

No let up!

Rolling over: A growing list of companies from FedEx to BMW are warning about the world economy Executives at FedEx, BMW, UBS and others are describing bleak macro-economic conditions around the world this week, which they say are weighing on business. The head of UBS says it was “one of the worst first-quarter environments in recent history,” while FedEx cited slowing international conditions and weaker global trade growth trends.

Decelerating global trade hitting home: U.S. manufacturing sector slowing as economy loses steam (Reuters) The Fed said manufacturing production dropped 0.4 percent last month. January was revised up to show output falling 0.5 percent instead of slumping 0.9 percent. Production at factories increased 1.0 percent in February from a year ago. Motor vehicles and parts output slipped 0.1 percent last month after tumbling 7.6 percent in January. Excluding motor vehicles and...

Gone negative year over year adjusted for inflation: This series looks to me like it’s flattened and adjusted for inflation remains well below 2008 highs, and hasn’t fully recovered from the collapse of oil capex at the end of 2014: New home sales appear to have rolled over at very low levels. They are pretty much only at levels of the early 1960’s when the population was maybe half of what it is today:

Trumped up expectations largely reversed: Highlights At 101.7, the small business optimism index fell short of expectations in February, recovering only 5 tenths of January’s 3.2 point dip. Econoday’s consensus was looking for 102.5 with the low estimate at 101.8. Employment plans lost ground for a second straight month with a turn lower for earnings trends the biggest negative in the month. One plus is that the he outlook for economy, after dropping sharply in January, did...

A bit of an uptic from a very low number, with last month’s data revised still lower and the outlook still looking very soft: Highlights For retail sales, no period has more seasonal extremes than the busy days of December vs the quiet days of January. This and weather make adjustment difficult and are likely part of the explanation for the extreme volatility of the December and January retail sales reports. Retail sales managed only a 0.2 percent headline gain in January...

It will take another few months to know if this is just ‘noise’ or it’s about to go negative. If you average the last two months, for example, it’s about 165,000 each: Highlights Averaging extremes is good advice to find an underlying path and February and January payrolls are an immediate example. Nonfarm payrolls rose by only 20,000 last month vs a revised 311,000 rise in January with the average at a very healthy 166,000. Payrolls are part of the establishment survey of...

Downward revisions for q4 GDP. And not how both imports and exports are down for the last 6 months or so as global trade decelerates: Highlights Revision estimates for fourth-quarter GDP will be coming down following an unexpectedly deep $59.8 billion trade deficit in December. Not helping the quarterly deficit are downward revisions to November and October that deepened the net deficit in those two months by $1.6 billion. The trouble is equally severe on both sides of the...

Bad. All sectors decelerating and residential looking down year over year: U.S. auto sales tumbled 2.8 percent in February (Detroit News) Overall sales for the month tumbled 2.8 percent from the same month a year ago, according to Edmunds.com. Sales came in at 1.26 million for an annualized industry sales rate slowed to 16.6 million. The estimated average transaction price for a new vehicle in February climbed to $36,590, according to Kelley Blue Book. That was $993...

Well done Professor Kelton! Stephanie Kelton explains Modern Monetary Theory This is particularly ridiculous: U.S. offers up to 6 million barrels of oil from emergency reserve (Reuters) The U.S. Energy Department said on Thursday it is offering up to six million barrels of sweet crude oil from the national emergency reserve in a sale mandated by a previous law to raise funds to modernize the facility. A law U.S. President Donald Trump signed last year requires the department...