Economic News Blog
Posted by: Steven Kline, Jr. 19. May 2016

Monetary Base Contracting Significantly

(Negative) In April 2016, the monetary base was $3.900 trillion. This was the fifth month in a row that the monetary base below $4 trillion. Compared with one year ago, the monetary base decreased 4.3 percent, which was the second fastest rate of month-over-month contraction since February 1938 (only January 2016 was faster). Also, it has contracted four of the last fiver months. As a result, the annual rate of change in the monetary base contracted for the second month in a row. The last time the annual rate of change contracted was June 1950. This is a significant event and uncharted territory for almost everyone alive today. It is likely that this will cause some surprising shifts in economic data.

You can see how the monetary base leads various machine tool sales and consumption data as well as primary plastics processing equipment at our monetary page.

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