Daily update

  • The US will deliver an ill-educated guess at how fast the US economy grew in the first quarter, with the first estimate of GDP. This number will be revised for years to come, and may well end up having little resemblance to today’s release. None of this will stop the breathless sensationalism of media reporting, nor politicians spinning the data right round (like a record).
  • What can we actually say about the US economy? We are reasonably confident it slowed in the first quarter. Two years of negative real wage growth has transferred income from consumers to companies, and lower savings and higher credit card debt are now limiting that. However, we also know official data misses more and more economic activity—as people rarely pay more tax than they need to, the positive tax revenue surprises hint at that.
  • Yet more corporate earnings signal the first quarter was plagued by more profit-led inflation. This is not something that hits the whole economy—it is focused on consumer-facing and near consumer-facing companies.
  • The Euro area offers some business and corporate sentiment opinion polls, which everyone will ignore. The ECB’s Panetta is to talk on the digital Euro. Everyone already uses digital Euros—private sector digital euros.
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