ECB Says Bank Loans to Private Sector Shrink Most on Record
By Jeff Black
July 25 (BN) — Lending to companies and households in the 17-member euro area fell the most on record in June in a sign the region is still struggling to shake off its longest-ever recession.
Loans to the private sector dropped 1.6 percent from a year earlier, the Frankfurt-based European Central Bank said today. That’s the 14th monthly decline and the biggest since the start of the single currency in 1999.
The rate of growth in M3 money supply, which the ECB uses as an indicator for future inflation, fell to 2.3 percent in June from 2.9 percent in May, according to today’s data. That’s below all 30 estimates in a Bloomberg survey of economists.
M3 grew 2.8 percent in past three months from the same period a year earlier. M3 is the broadest gauge of money supply and includes cash in circulation, some forms of savings and money-market holdings.
Daily Archives: July 25, 2013 @ 5:44 pm (Thursday)
A Few Charts
Claims were looking to be lower due to auto workers working through the usual layoff period, but they remained high on the seasonally adjusted basis and looks to have rebounded from the April soft spot and subsequently gone sideways.
The EU has been struggling with something like we might be faced with- proactive deficit reduction and a private sector not stepping up to ‘borrow to spend’ to fill the gap.
Today’s durable goods shipments shortfall has caused further reductions in Q2 GDP estimates. Yes, new orders look promising, and Q3 estimates are still in the 2.5% range. And I remain on the lookout for signs of the credit expansion needed to support those forecasts in the context of the reduced federal deficit and the aggressive automatic fiscal stabilizers that remove income and savings of net financial assets as the economy grows.
Today’s combo of lower stocks and higher bond yields has been the typical response to an increased tapering possibility, along with the recently increased possibility of Summers as Fed chairman, with his presumably higher inclination to hike rates than Yellen.
EU Loans to Non Financial Corporations Outstanding
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EU Loans to Households Outstanding
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Initial US Jobless Claims SA and NSA
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