Atlanta Fed GDP Now forecast for Q1 2016 plummets down to 0.6%

ISM manufacturing falls more than expected

'Data on US manufacturing in April showed that the sector is still facing big challenges.

The ISM manufacturing purchasing manager's index (PMI) was 50.8, dropping from 51.8 in March.

This showed that the sector expanded — denoted by an index above 50 — but at a slower pace than expected.

Economists had forecast a PMI of 51.4. Their optimism was based partly on the rise in crude oil prices and the drop in the US dollar — two of the biggest headwinds to manufacturing in the last few months.

The data showed that the setbacks from these and other challenges linger.

New orders and production grew for a fourth straight month, while employment fell for a fifth.

Markit Economics' final PMI came in at 50.8, unchanged from the preliminary reading.

This print indicated that overall, the manufacturing sector barely grew or contracted. But it pointed to the weakest performance since September 2009. '

ISM Manufacturing, Markit PMI - Business Insider

If anyone is wondering why with so much 'money printing' that there is so little inflation?

This is why...



https://research.stlouisfed.org/fred2/series/M2V


Jeez...the Money Velocity just took another big drop last quarter and is now MILES lower then any time in American recorded history.

Not a little bit lower...MILES lower.


So, to those that understand about free market economies and that lots of debt is bad in the long run BUT are not sure how to answer Krugmanites when they say 'hey, where is all that inflation you guys promised would occur".

Just point them to the above chart and say 'this is where it went'.

It is almost impossible to have inflation when Money Velocity is plummeting.

And then they might argue - 'but the velocity is falling so hard because SO much money is being printed.'

Sorry Charley. That is not true because, as I pointed out elsewhere, the velocity is falling at a much higher rate then the M2 money supply is growing.
Which leaves only one (realistic) cause...people/banks are not spending the money.


And anyone who is ignorant enough to think this is a good thing. Just point out to them that the shaded areas of the above chart are economic contractions. And they will see that the velocity falls hard during contractions.

No matter how they spin it...this is NOT a good thing. This is a bad thing.