The narrow and broader measures of the money supply for the euro area increased slightly in May compared to April according to monetary statistics just released by the ECB.
The M1 money supply increased 0.6% on April, while M2 and M3 both increased 0.5% on the same basis.
Year to date, the M1 is up 2.6%, the M2 is up 1.4% and the M3 is up 1.0%.
Compared to May last year, the M1, M2 and M3 money supply measures increased 5.1%, 2.2% and 0.9%, respectively.
Common for all these measures of the money supply is that their current year on year growth rates are considerably lower than their prior peaks from the end of 2012 and the beginning of 2013.
These growth rates are also significantly lower than that observed for the U.S. economy where the M2 is currently expanding some 6.5% compared to last year (here). These declining growth rates also help explain Draghi's fear of price deflation (here) as price inflation for the euro area remains below the 2% target.
Meanwhile, also in stark contrast to the U.S. (and many other countries), the monetary base in the euro area continues to decline compared to last year and is now 34.0% lower than the peak from June 2012.
The M1 money supply increased 0.6% on April, while M2 and M3 both increased 0.5% on the same basis.
Year to date, the M1 is up 2.6%, the M2 is up 1.4% and the M3 is up 1.0%.
Compared to May last year, the M1, M2 and M3 money supply measures increased 5.1%, 2.2% and 0.9%, respectively.
Common for all these measures of the money supply is that their current year on year growth rates are considerably lower than their prior peaks from the end of 2012 and the beginning of 2013.
These growth rates are also significantly lower than that observed for the U.S. economy where the M2 is currently expanding some 6.5% compared to last year (here). These declining growth rates also help explain Draghi's fear of price deflation (here) as price inflation for the euro area remains below the 2% target.
Meanwhile, also in stark contrast to the U.S. (and many other countries), the monetary base in the euro area continues to decline compared to last year and is now 34.0% lower than the peak from June 2012.
