Monetary Base Grows 35.8% in January 2014
Changes in the monetary base, or money supply, have a significant impact on capital equipment sales. In January 2014, the monetary base was $3.749 trillion dollars. That is 35.8% more than it was in January 2013. But, the increase in January from December was significantly less than the $65 billion of quantitative easing the Federal Reserve claims to be doing after is taper. This is the second consecutive month that month-over-month rate of growth has slowed down. The increase in the money supply this month was still enough to push the annual rate of change higher. It increased to 25.6%.
At the current rate of monthly increase in the money supply, the annual rate of change will not see a deceleration in its rate of growth until June 2014. This indicates that capital equipment sales should be strong in 2014. Further, this shows that capital equipment spending is likely to see slower growth or contraction in 2015.
To see some other charts related to the monetary base and debt levels, go to our monetary page.
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