Economic News Blog
Posted by: Steven Kline, Jr. 10. June 2019

Monetary Base Drops to Lowest Level Since June 2013

In April, the monetary base was $3.263 trillion, which was its lowest level since June 2013. April was the 15th consecutive month of month-over-month contraction in the monetary base. For each of the last seven 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 eighth month in a row, accelerating to -9.6%. This was the fastest rate of annual contraction since August 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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