800 billion over 10 years is something, but not enough to turn things around as it’s maybe .25% of GDP per year or so. Historically it’s taken a good 5% of GDP deficit to reverse a decline, which today means close to a 1T deficit annually. And interesting how they just jumped all over Trump […]
Category Archives: Government Spending
Producer Prices, Retail sales, Business inventories, Atlanta Fed, Debt Ceiling Comment
Gives the Fed another dovish data point: PPI-FD Highlights Producer prices show wide weakness and may raise talk that deflationary pressures are building, not easing. The PPI-FD fell 0.5 percent in September which is just below Econoday’s low estimate for minus 0.4. Year-on-year, producer prices are falling deeper into the negative column at minus 1.1 […]
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 just over 100% […]
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 refinancing applications, the […]
fiscal drag from california
Update: The California Budget Surplus
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, and for Q3 […]
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 debt, for all […]
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 rising inventory ratios […]
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 Q3 and then […]
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 account surplus that’s […]