Daily update
Daily update
- China’s economy had 2.9% y/y growth in the fourth quarter—better than expected, but China’s economic data is expected to do better than expected. The composition of the data suggests a declining consumer share of GDP. Generally, consumer-led growth in China is thought to be better quality, so this has signals for trend growth.
- China’s population fell in 2022, which emphasizes an important point in international economics. GDP is about how many people a country has, and how hard they work (population growth and productivity growth). Falling populations make negative growth more likely, and that applies to China, Japan, Germany, and Italy today.
- UK labor data showed fewer hires in December, with November data revised lower. Externally advertised job vacancies dropped, possibly reflecting reduce labor churn. Real wages remain very negative, reminding investors that pay bargaining power is weak and inflation is more about profit expansion than rising wage costs.
- Sentiment data is due from Germany (the ZEW survey of economic experts), and the US (the Empire State survey, which arguably has a Democrat bias to its results). Final German CPI for December is unlikely to change—next month’s data will be based on new consumption weights, which are likely to increase the importance of energy to the calculation.
