Economic News Blog
Posted by: Steven Kline, Jr. 13. May 2019

Monetary Base Continues Double-Digit Contraction

March was the 14th consecutive month of month-over-month contraction in the monetary base, which was $3.303 trillion. For each of the last six months, the month-over-month rate of contraction was faster than 11%. Only the ten-month period from June 1921 to March 1922 had a longer streak of double-digit contraction month-over-month. 

As a result, the annual rate of change in the money supply contracted for the seventh month in a row, accelerating to -8.9 percent. This was the fastest rate of annual contraction since September 1922. The money supply is indicating that the current decelerating growth in machine tool orders (and quite likely capital equipment in general) will continue for some time.

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