Government Spending Archive

The Fed’s Sort of Right Move for the Wrong Reasons

The Fed did not raise rates because the FOMC concluded this was not the time to remove accommodation. I agree this is not the time to remove accommodation. But I do not agree lower rates and QE are accommodative. Changing rates shifts income between borrowers and savers, and with the federal debt ...Read More

Mtg purchase applications, UK industrial production, Saudi visit, US budget deficit

Purchase apps came in 41% higher than a year ago, but have been going nowhere for several months and now look to be drifting lower, as in any case they remain at seriously depressed levels: MBA Mortgage Applications Highlights After jumping 17.0 percent in the prior week on a rate-related surge in ...Read More

fiscal drag from california

Update: The California Budget Surplus ...Read More

macro update

Saudis remain price setter: Main theme: deflationary biases Greece is a deflationary event, as EU aggregate demand is further restricted, with no sign of any possibility of fiscal relaxation. Oil fell as Saudis increased discounts, further reducing global capex and related asset prices. US oil production that gets sold counts as GDP, ...Read More

Sanders endorsement, Greece, Passenger transportation services index

A bit of press for my endorsement of Bernie Sanders for President after a chat with Stephanie Kelton which included how they’ve been working together on his economic agenda. Warren Mosler – An International Leader in Modern Monetary Theory Endorses Bernie Sanders Varoufakis completely misses the point. First, the only way public ...Read More

Federal Deficit below last year

The budget deficit is now looking too small to sustain growth, as evidenced by the incoming data over the last 6 months. The problem is, as always, unspent income- aka demand leakages- must be offset by agents spending more than their incomes or the output goes unsold. And collapsing GDP growth and ...Read More

macro update

At the beginning of 2013 the US let the FICA tax reduction and some of the Bush tax cuts expire and then in April the sequesters kicked totally some $250 billion of proactive deficit reduction. This cut 2013 growth from what might have been 4% to just over half that, peaking in ...Read More

claims, producer prices, euro comments, public sector jobs

Just a reminder, claims measure those losing jobs who file for benefits, not new hires: Jobless Claims The euro has been moving higher vs the dollar, as CB selling winds down as they reach the lower limits of their reserve targets along with fundamental support from a large and growing EU current ...Read More

NFIB chart, NY Fed debt chart, April tax collections

Small increase and still down from year end levels, still very low historically, real sales- what matters most- were down: Small Business Optimism Rises, But Future Sales Cloud Outlook The Small Business Optimism Index increased 1.7 points from March to 96.9, this in spite of a quarter of virtually no economic growth. ...Read More

Redbook retail sales, Small business confidence, JOLTS, Japan budget

So now they don’t have Easter to kick around anymore and they’re still weak: Redbook Retail sales picked up slightly in the May 9 week as Easter-effects finally fade, but at a year-on-year plus 2.1 percent sales remain soft. Redbook reports an as-expected Mother’s Day holiday in the week and reports early ...Read More