Mosler Economics

Getting even more serious- year over year down 6%: Highlights The purchase index fell for a fourth straight week and down steeply, at a 6.0 percent rate which is not only the weekly change but also the yearly change as well. The report attributes the fall to “renewed uncertainty about the domestic and global economy” which it said held buyers off the market. But citing strength in the labor market, the Mortgage Bankers’ Association expects purchase activity to pick up in the...

Trumped up expectations fading: Highlights Doubts about future economic growth diminished optimism among small business owners to the lowest level in 26 months, according to the NFIB’s Small Business Optimism Index, which fell 3.2 points in January to 101.2, below consensus expectations as well as the range of analysts’ forecasts. Though still above the long-term average of 98, the optimism reading has retreated sharply from the 45-year high set last August, and the fall in...

The ‘labor market’ is not a ‘fair game’ as people need to work to eat, and business only needs to hire if it likes the return prospects, so real wages should be expected to remain depressed without some form of outside support, which broke down in the 80’s with globalization policies, and the share of GDP going to capital began to rise: General weakness continues: US imports way down, as reflected in general global weakness, and same for weak US exports. And also indicative...

Looks like this source of private sector deficit spending may have been the driver behind about 1.5% of GDP growth, taking the place of bank lending. But most recently the growth looks to have slowed: US Q1 earnings tipped for first decline in 3 years (FT) Consensus estimates point to a 0.8 per cent drop in earnings per share this quarter, according to FactSet, a dramatic markdown from a forecast of 3.3 per cent growth at the end of December. With about half of the...

Global retreat underway? US ISM New York Index at 7-Month Low in January

Lots of headlines pointing to corporate weakness: Amazon sales outlook falls short after record holiday quarter (Reuters) Fast and free shipping helped the world’s largest online retailer boost revenue by 20 percent. Net income jumped 63 percent to $3 billion for the fourth quarter. Its international operating loss shrunk to $642 million in the quarter from $919 million a year earlier. The company forecast net sales of between $56 billion and $60 billion for the first...

Apple says China sales fell 27% last quarter (Nikkei) Apple’s net sales in greater China, including the mainland, Hong Kong and Taiwan, fell 27% on the year to $13.17 billion for the three months ended Dec. 29 in results announced Tuesday. This marked the first downturn there in six quarters. Combined sales elsewhere, including the U.S., Europe and Japan, grew 1% to $71.1 billion, pointing to China as the central cause of the sluggish quarterly results. Greater China as a...

Imports up, exports down: China’s December industrial profits fall for 2nd straight month (Reuters) Profits notched up by China’s industrial firms declined 1.9 percent from a year earlier to 680.8 billion yuan ($100.9 billion) in December. For the full-year of 2018, industrial profits increased 10.3 percent on an annual basis to 6.64 trillion yuan, versus the 11.8 percent gain in the January-November period, the National Bureau of Statistics (NBS) said on its website....

Agent Orange, AKA Tariff Man, taking down the global economy: Intel Projects Slower Revenue Growth This Year (WSJ) Intel Corp. reported a 9% gain in revenue. Customers’ robust appetite for server chips boosted data-center businesses by 45% through the first nine months of 2018, but now those buyers need to digest those purchases, finance chief and interim chief executive Bob Swan said. That slowdown will hit the next two quarters as well, he said. The company now...

Euro area business growth close to stalling at 5½ year low in January (Markit) Flash Eurozone PMI Composite Output Index at 50.7 (51.1 in December). Services PMI Activity Index at 50.8 (51.2 in December). Manufacturing PMI Output Index at 50.4 (51.0 in December). Manufacturing PMI at 50.5 (51.4 in December). The factory sector reported the weakest expansion since the current production upturn began in July 2013, while the service sector expansion was the smallest since...