Weekly Updates
Weekly Updates
- The most powerful technological change of the fourth industrial revolution is probably not AI or robotics, but social media. The power of stories to influence behavior, including investor behavior, has increased significantly. The narrative around developed economy manufacturing this year shows just what a problem story telling can be.
- Since the start of the year, the US ISM manufacturing sentiment survey has resolutely signaled a downturn. The German manufacturing PMI sentiment measure is nothing less than a horror show—slumping ever deeper into negative territory. The UK manufacturing PMI has not signaled expansion for over a year, and French data seems to be trying to outdo Germany in its tale of awfulness.
- In the real world, US manufacturing has produced stable output volumes all year. No downturn. German manufacturing sales volumes have been stable all year—no plunge into the abyss. UK manufacturing production rose this year, and French manufacturing production has been remarkably stable.
- Sentiment data fits into the social media age. It is published frequently and with a seductive amount of detail, so there is always something to tweet about. But this year, at least, the narrative is more of a fairy tale. Economic reality is not necessarily well served by the social media age.
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