Monetary Base Contracting at Fastest Annual Rate since June '38

(Negative) In August 2016, the monetary base was $3.841 trillion. While this was up slightly from last month, compared with one year ago the monetary base decreased 4.0 percent. This was the eight time in nine months and 12th time in the last 15 months that it has contracted. As a result, the annual rate of change in the monetary base, now -2.0 percent, contracted at an accelerating rate for the sixth 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.