Daily update
Daily update
- Yesterday’s US GDP revisions offered several lessons to investors. The tendency for many countries to revise economic activity frequently, significantly, and positively is a reminder that real-time data lacks precision and data dependency is not a proper policy framework. Someone should attempt to explain that to Federal Reserve Chair Powell. The 2022 “technical recession” (a media term, not an economist’s term) was predictably revised out of existence.
- Positive revisions to the strength of the consumer and evidence of a large savings stockpile than previously estimated suggest today’s consumer spending data should continue to be healthy. Data revisions also suggested that profit-led inflation peaked in the second quarter (retailers’ profits as a share of their economic activity basically plateaued). The data yesterday and today are likely to scream “soft economic landing”.
- France and Spain offer preliminary September consumer price inflation, and in both cases the headline rate is forecast to sink quietly below the magic 2% y/y number. Japan’s September Tokyo CPI also exhibited disinflation as energy subsidies were reintroduced.
- There are several European Central Bank speakers, including Chief Economist Lane. Over the weekend, Austria will hold elections. The performance of the far-right FPÖ will be watched by investors as a signal of the broader European trends towards prejudice politics.
