Author Archives: WARREN MOSLER

New home sales, Manufacturing surveys, Trump on Fed, Pence, Turkey

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Up some for the month, but remain weak and depressed historically, especially on a per capita basis:


Manufacturing surveys continue to forecast weakness:


I think what he wants rate cuts because he (and most everyone else) believes that will make the dollar go down which he further believes will reduce the trade deficit and support economic growth:

And the VP isn’t far behind the big guy:

Pence says other countries should ‘emulate’ US economic policies to catch up

Vice President Mike Pence said Thursday that other countries should “emulate” US policies.
However, he also said the US should imitate the policy of other nations who keep their interest rates anchored near zero.

Looks to me like Turkey has got it right- inflation will fall and the currency firm as they cut rates. But I don’t expect it to help the economy, but instead the rate cuts will likely weaken it, begging a fiscal adjustment to support employment and output:

Erdogan Says Turkey to Soon Cut Interest Rates to Single Digits

President Recep Tayyip Erdogan said Turkey will lower interest rates to single digits soon and inflation will follow suit.

“We are lowering and will lower interest rates to single digits in the shortest period,” Erdogan said in a televised speech on Sunday. “After it falls to single digits, inflation will also slow to single digits.”

The drop in inflation after rate cuts is an apparent reference to Erdogan’s personal belief that price gains slow when the cost of borrowing is reduced. Most economists think the opposite is true.

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Japan, China, Housing starts

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The global trade collapse from tariffs continues:

They all have it backwards- it’s the 5th deadly innocent fraud- as the great global trade collapse continues:

Blackstone’s Schwarzman: China’s economic ‘miracle’ came at the expense of the US and the West

“That leads the developed world to say to China: ‘We’ve got to rebalance this. It’s working for you. It’s not working for us,’” says Blackstone CEO Stephen Schwarzman.

Up a bit this month, but levels remain historically depressed, and it’s likely some demand was moved forward by the sudden drop in rates. Also note that the chart isn’t population adjusted.

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Industrial production, China, NY Fed

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Up a bit this month but the chart isn’t looking promising:

New York Fed’s New SCE Household Spending Survey Shows Expected Growth Of Household Spending Will Slow

Today, the Federal Reserve Bank of New York’s Center for Microeconomic Data updated its Survey of Consumer Expectations (SCE) Household Spending Survey, which provides information on individuals’ experiences and expectations regarding household spending.

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Retail sales, Consumer Sentiment, Rails, Sea containers, Wholesale sales, Employment, Hours worked

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Up a bit but still looking a lot lower than a few months ago:


“Deep in contraction”

Analyst Opinion of Container Movements

Simply looking at this month versus last month – there were only marginal changes to weak numbers. The year-over-year rate of growth improved for imports and marginally worsened for exports. Still, year-to-date growth for both imports and exports remain deep in contraction.

The three-month rolling averages for exports and imports are also in contraction.

Imports container counts give an indication of the U.S. economy’s state and the soft data continues to indicate a weak U.S. economy. Exports are saying the global economy is weak as well.

Container data is consistent with other transport data indicating a weak economy.


Contraction:

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Rail traffic, China, Weather politicization, CNN comments

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Contraction:

The tariff induced collapse of global trade continues:

Politicization of weather forecasting:

NOAA staff warned in Sept. 1 directive against contradicting Trump

Elliott Management, a top activist shareholder firm, announced Monday that it has a $3.2 billion stake in AT&T. WarnerMedia, which owns CNN, is under AT&T.

“Great news that an activist investor is now involved with AT&T. As the owner of VERY LOW RATINGS @CNN, perhaps they will now put a stop to all of the Fake News emanating from its non-credible ‘anchors,'” Trump claimed in a tweet. “Also, I hear that, because of its bad ratings, it is losing a fortune.”

“But most importantly, @CNN is bad for the USA,” the president continued in a follow-up tweet. “Their International Division spews bad information & Fake News all over the globe. This is why foreign leaders are always asking me, ‘Why does the Media hate the U.S. sooo much?’ It is a fraudulent shame, & all comes from the top!”

Trump claims CNN ‘is bad for the USA’ as he praises new AT&T investor

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Factory orders, ISM Non Manufacturing, Markit services and composite PMI, ADP, President changes weather forecast chart

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Up for the month, but still trending down, and on an inflation adjusted basis still well below the highs of the last cycle:


Up for the month, but still trending lower:


And lower in this survey with the same type of trend:


Up for the month but still trending lower:

Clinical…

Trump shows apparently altered Dorian trajectory map

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Trade, ISM NY, Profits

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Highlights

Going into the accelerated trade tensions of August and before the US-China tariff hikes of September, US trade was improving, at least slightly. July’s trade deficit came in at $54.0 billion which is well down from June’s revised $55.5 billion total but still marginally over the $53.9 billion monthly average of the second quarter. This comparison gets net exports off to a slow start for third-quarter GDP.

The bilateral goods deficit with China rose sharply in July, to an unadjusted $32.8 billion from June’s $30.0 billion reflecting a fall in exports and a rise in imports. Yet year-to-date (which helps smooth unadjusted data), this deficit is down, at $196.8 billion versus $222.6 billion this time in 2018. This is a positive for 2019 GDP.

Total international trade has been depressed for the US this year as it has been for many of the global economies. US exports are down 0.6 percent from July last year for the fourth month of year-on-year contraction in what is the worst run for this reading in three years. Imports, up 0.1 percent, continue to skirt the year-on-year zero line.

Gains in July exports were led by consumer goods and included gains for autos and capital goods. Exports of foods, feeds & beverages were lower for 2.2 percent year-on-year contraction. Imports show a sharp drop for capital goods while imports of foods rose as they did for autos and also consumer goods.

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