So who is lying then?

Last week Mr Obama went on what some might call a victory lap, crowing about his Administration’s economic accomplishments, all but calling those who criticise the current state of the American economy “liars”. Hmmm. Why not stop with the name calling, please?

Sure, GDP is positive, but eager to distribute the Happy News Mr [...]

So The G20 Finance Ministers are having a meeting …

In Shanghai no less, epicenter of recent market volatility. Apparently on their agenda is a discussion that will allow these nations to agree a way forward to improve global growth. The IMF is urging bold action, while China suggests is has a few tricks up its sleeve in fact more than a few , while [...]

US recession looming?

In the wake of The Fed’s ill-advised rate hike , speculation is growing about a US recession in 2016.

But is this probable? Yes. Parts of the US economy, for example, energy, are already in recession. Meanwhile, the US economy is already slowing and sharply.

Keep in mind that higher interest rates, theoretically, [...]

The US economy is teetering

Friday’s news that US GDP slowed markedly in Q4 2015 to 0.7% from a preliminary estimate of 2% was a surprise to many, but the trend was clear from looking at the data. The Personal Consumption Expenditure (PCE) provides an effective measurement of consumption in The United States. In other words, when people buy stuff [...]

Higher government spending leads to slower growth

ok so US Q3 GDP just revised down to 2.0% from the flash number of 2.1%,. We expect GDP to further disappoint into Q4 2015 and 2016. Why?

The chart below shows the annual change in US real GDP (red line) compared to US Government Expenditures (aka, “spending”) divided by US real GDP (black [...]

What a recovery

Most of the happy news about GDP looks at quarterly changes, but a broader perspective reveals a different story. The chart above shows real1 GDP from January, 1947 to the present. I’ve calculated the average GDP for the period of economic expansion in the table below. The present period of expansion is the second [...]

Increasing debt, slowing growth

A combination of the latest US GDP numbers failing to inspire and The Fed’s waffling on further stimulus (seriously, if the economy were on track they should be talking about decreasing further debt purchases) has led people to begin to question the current policy of relentlessly increasing debt.

Just to clarify things I [...]

Growth at what cost?

The chart above shows two series: Real Gross Domestic Product (GDPC1, black line) and Total Public Debt (GFDEBTN, red area curve). Both are measured quarterly in billions and millions of dollars respectively. Three different recessions, illustrated with vertical grey bars are covered: the Early 1990s recession (July 1990 to Mar 1991), the Early 2000s [...]

Retail sales plunge what happens to GDP?

Retail sales for the first week of April plunged 2.7%, when compared to the first week of March – what’s the driver and we should we care?

It seems the well known sequester and its effect on government spending is starting to bite. But the sequester is taking place in an overall trend [...]

US Money Supply: Ad Astra

The chart above shows St. Louis Adjusted Monetary Base (AMBSL, black line, measured monthly) for the period January 2003 to March 2013. We can see that until the depths of The Great Recession growth in the supply of money was relatively benign; in fact the money supply increased, on average, by roughly 3% per [...]