Mosler Economics

The chart says it all- deceleration that started when oil capex collapsed not abetting, and the decelerating credit charts indicate much more of same coming: Highlights An unexpectedly weak employment report has put a rate hike at this month’s FOMC in doubt. Nonfarm payrolls rose only 138,000 in May which is nearly 50,000 below expectations. Importantly, April and March have been downwardly revised by a net 66,000. Average hourly earnings are also not favorable, up only 02...

While it did spike up some this week, the downtrend is still intact as per the chart: Highlights On the strong side this year, ADP is calling for a resumption of outsized employment gains, at 253,000 for private payrolls in tomorrow’s May employment report vs Econoday’s consensus for 172,000 (Econoday’s consensus has since moved to 173,500 following ADP’s report). ADP has been hitting and missing this year, making remarkably good calls for oversized strength in January and...

Another down week but still a bit higher than last year. But actual loan growth is far lower than last year: Trumped up expectations coming down: Highlights Business growth is slowing in the Chicago area with weakness appearing in orders. The May PMI of 55.2, though down more than 3 points in the month, is still very solid but new orders slowed abruptly in the month to a 4-month low with backlog orders in contraction for a sixth straight month. Employment is flat and...

As expected with prior month’s spending revised up .2. Annual growth rates still not looking so good, as per the charts: Highlights April was mostly a favorable month for the consumer who benefited from strong wage gains, kept money in the bank, and was an active shopper at least compared to the first quarter. Consumer spending opened the second quarter with an as-expected 0.4 percent gain with strength in durables spending, including vehicles, offsetting another subpar...

If these numbers don’t turn up q2 gdp could be a lot worse than q1:

Real consumer spending revised up a bit, and not to forget that includes health care premiums, and q2 now looking a lot worse than previously expected: Highlights First-quarter GDP gets a small but much needed upgrade, now at a 1.2 percent rate of annualized growth which is nearly double the advance estimate. The gain is centered where it is best, in consumer spending where the rate did double to 0.6 percent. This is still slow but is an improvement with durable goods, at...

As previously discussed, seems to me it’s unlikely any of the trumped up expectations willcome to pass: McConnell: ‘I don’t know how we get to 50’ votes on ObamaCare repeal (The Hill) Senate Majority Leader Mitch McConnell says he doesn’t know how Senate Republicans are going to get enough votes to pass an ObamaCare replacement bill. “I don’t know how we get to 50 [votes] at the moment. But that’s the goal,” McConnell told Reuters in an interview Wednesday. McConnell...

Larger than expected and last month revised higher, indicating GDP was a bit lower than estimated, and weak sales matched with weak inventories don’t clear the shelves: Highlights A key early indication on the strength of second-quarter GDP is not favorable as the nation’s goods deficit widened $2.5 billion in April to $67.6 billion. Exports of goods continue to show weakness, down 0.9 percent in the month to $125.9 billion that show sharp declines for vehicles and consumer...

Not good: Highlights Purchase applications for home mortgages fell a seasonally adjusted 1 percent in the May 19 week, but refinancing applications rose 11 percent from the previous week to the highest level since March. The drop in purchase applications follows a 3 percent decrease in the prior week and takes the year-on-year purchase index gain down 6 percentage points to 3 percent. Lower rates during the week gave a big boost to refinancing, and the refinancing share of...

Seems to be slowing in line with the deceleration in mortgage lending previously discussed: Highlights In a mixed report that confirms a reputation for unusual volatility, new home sales swung 11.4 percent lower in April to a much lower-than-expected annualized rate of 569,000. The offset is a 40,000 upward revision to March and February, now at 642,000 and 607,000. Averages are essential to evaluate this report and here the news is clearly good, at a 3-month average of...