Daily update
Daily update
- US November consumer credit jumped higher. Middle income consumers may borrow while still having savings to smooth consumption. Lower income consumers are more likely to borrow involuntarily (buying essentials on credit card, without having enough money to pay the bill at the end of the month). The increased dependence on credit supports consumer spending for now, but is a reminder that there are limits to spending—a soft economic landing is still an economic landing.
- Consumers’ habits are indirectly revealed in November trade data from the US. These figures contribute to the complicated picture of a declining trade share in the global economy. Japanese consumer spending volumes fell more aggressively in November—Japanese consumers seem quick to react negatively to price increases. The UK’s December BRC shop sales (a value measure) slowed although UK consumers increasingly spend online rather than in shops around Christmas.
- German November industrial production fell more than expected, with only the energy sector recording growth. Of course, this being Germany there were (minor) positive revisions to the previous month’s data.
- French Prime Minister Borne, whose approval rating was slightly lower than that of French President Macron, has been invited to resign ahead of the European elections. Markets will not view this as being significant for policies.
