Economic News Blog
Posted by: Steven Kline, Jr. 12. October 2016

Monetary Base at Lowest Level since December '13

(Negative) In September 2016, the monetary base was $3.749 trillion. This was the lowest level since December 2013. Compared with one year ago, the monetary base decreased 7.4 percent, which was the fastest month-over-month contraction since February 1938. This was the ninth time in 10 months and 13th time in the last 16 months that it has contracted. As a result, the annual rate of change in the monetary base, now -2.6 percent, contracted at an accelerating rate for the seventh month in a row. The last time the annual rate of change contracted faster was June 1938. This was during the second leg down of the Great Depression. So, perhaps this is an indication that we are entering the second, and hopefully final, leg down in the Great Recession. 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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