Commentary from my daily report, "The Fiscal Liquidity Index."
| (The Index is something that I created that tracks "net spending" by the government.) |
Current situation:
The Index was positive for the eighth consecutive day at 30.6, however, it was down slightly from Tuesday’s reading of 35.3. The raw (un-smoothed) index held steady at 27.8. Treasury had a gross deficit of $100.7 bln. You have to go all the way back to Mar 2011 to see a higher monthly gross deficit. Remember, deficits add to private sector financial balances, so this is definitely a positive development. Real net spending (total outlays adjusted for public debt redemptions) totaled $231.4 bln. That is $51.2 bln above last month so it is another piece of good news. It shows that net spending is quite strong and we know that positive net spending adds to demand. There is, however, one caveat. Employment tax receipts are trending down and are now running near the lowest level of the year when compared to the same period in 2011. And when you look at the data it seems to be suggesting that employment peaked on or around Jan 17. If so, it may be the first sign of economic weakness in what has generally been a pretty strong beginning of the year. The divergence indicator was 112.7, so the risk level remains orange.
5 comments:
Good data, Mike.
I still haven't figured out the short term variations in the Federal deficit, but the withholding tax revenue seems like it should be a reliable indicator, without the dubious "adjustments" found in much of the BLS stats.
Please continue to keep us informed.
Seems like the monthly deficit is trending back to it's seemingly desired level of about 100-110B per month....
The last 6 months or so of this "debt ceiling" debacle have wrenched and fought with this non-govt sector savings desire back and forth a bit, but now with the 1.2T ceiling out there in front of us, things should revert back to the normal slightly higher than 100B/mo. rate...
as Treasury is now less constrained to make timely payments to the non-govt sector for govt provision, which is all that is really going on here with net Treasury withdrawals...
this should be helpful imo.
Resp
Japan: slowly waking up to doomsday debt risk ..
http://www.reuters.com/article/2012/02/17/us-japan-debt-idUSTRE81G0IZ20120217
but article does not state that debt is in YEN and not in German D-marx !
Goog,
You got it!
People should have to pass some sort of test before they are allowed to write articles like that for Reuters...
Resp,
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