Daily update
Daily update
- US July consumer price inflation data continued recent trends. Most sectors of the US economy have deflation somewhere (furniture prices seem to be plunging in California. Clothing prices are falling in New York). Fictional prices for housing are propping up the inflation data—which means middle income homeowners have more spending power than consumer price numbers imply.
- The spending power is relevant with today’s US July retail sales data. The force of hedonism remains strong in the US consumer. While the ongoing trend toward spending on fun is not captured in these numbers, they matter as a reflection of the labor market—both as a driver of employment and as a signal of low fear of unemployment. Weekly initial jobless claims figures are also due.
- Japan’s second quarter GDP was better than expected although the first quarter data was revised weaker. Consumer spending helped boost the numbers. The Bank of Japan is still likely to proceed with caution as it seeks to normalize policy.
- UK second quarter GDP was in line with expectations—a somewhat disappointing consumer offset by government spending. The difficulty of capturing the economic effects of the UK’s structural change means that these numbers are likely to be revised (with a positive bias).
