Monetary Base Contracts 6 of Last 7 Months

(Negative) In June 2016, the monetary base was $3.841 trillion. This was the lowest level for the monetary base since January 2014.  Compared with one year ago, the monetary base decreased 2.7 percent, which was the sixth time in seven months and 10th time in the last 13 months that it has contracted. As a result, the annual rate of change in the monetary base contracted at an accelerating rate for the fourth month in a row. The last time the annual rate of change contracted faster was June 1950. The last time it contracted at a faster rate was December 1949. Of course this was an extremely different time as the U.S. was ratcheting down its spending for WW2. So, the current changes in the monetary base are a significant event and uncharted territory for almost everyone alive today. 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.