Mosler Economics

Highlights Factory orders, like much of the economy, fizzled in March, up only 0.2 percent and skewed higher for a third month in a row by aircraft. The split between the report’s two main components shows a 0.5 percent dip for nondurable goods — the new data in today’s report where weakness is tied to petroleum and coal — and a 0.9 percent rise for durable orders which is 2 tenths higher than last week’s advance report for this component. The gain for durables looks...

U.S. small business borrowing stalls in March By Ann Saphir May 1 (Reuters) — Borrowing by small U.S. firms stalled in March, as business owners remained cautious about investing amid policy uncertainty, data released on Monday showed. The Thomson Reuters/PayNet Small Business Lending Index for March registered 134, down 1 percent from last March. The index was up 4 percent from February, which had four fewer working days. Doesn’t seem to scale very well… ;) Tesla said net...

Low and worse than expected, and inline with the deceleration in bank auto lending, as previously discussed, which doesn’t bode well for other sales measures tied to credit expansion: Highlights The earliest hint on whether consumer spending bounced back in April is positive. Unit vehicle sales rose from March’s very soft 16.6 million annualized rate to 16.9 million which however is below expectations for 17.2 million. Sales to consumers and sales to businesses are not...

Last month revised lower and low and below expectations this month. Again, in line with decelerating credit data which means persistent weakness in GDP: Highlights Based on the consumer and based on inflation, FOMC members won’t be feeling much pressure to raise rates at least not any time soon. Consumer spending was unchanged in March, even weaker than Econoday’s 0.1 percent consensus. More startling is the weakest showing in 16-1/2 years for core PCE prices which fell 0.1...

A very low initial print, with inventories down as expected as was consumption growth. And the investment data that did grow strongly is volatile and subject to reversal which would limit q2 growth as well. Expectations have come off some but remain trumped up, even as the hard data shows ongoing weakness. And note how q2 forecasts are now starting up where q1 forecasts were this time 3 months ago: Highlights The weakest showing since the last recession for consumer...

You can see from the chart that growth of mortgage applications for home purchases has been near 0 for quite a while, and remains historically depressed. The lines zigging downward are Saudi initiatives to lower prices, and as price setter they will necessarily prevail for as long as they have excess capacity:

New home sales better than expected, but remember it’s about permits, as no home is built without one: Note how weak this is vs past cycles: Annualized rate of total sales keeps working its way lower from last year’s peak of about an 18.5 million pace, which also coincides with the deceleration in auto lending: From WardsAuto: U.S. Forecast: Mild Sales, Growing Inventory The report puts the seasonally adjusted annual rate of sales for the month at 17.1 million units, well...

See any reason not to panic?;)

The unadjusted Purchase Index decreased 3 percent compared with the previous week and was 1 percent lower than the same week one year ago. Trumped up expectations falling off:

Very modest growth continues from the lows following the crash in oil capex, and note that the numbers are not inflation adjusted: The painfully slow recovery following the crash continues, and note the numbers are not population adjusted: Trumped up expectations fading: Forecasters Lower Growth Outlook as Hopes for Quick Stimulus Fade By Josh Zumbrun Apr 13 (WSJ) — Following the election, respondents to The Wall Street Journal’s monthly survey of forecasters...