Daily update
Daily update
- The economic story for 2023 might be summed up by the mixed narrative of the Federal Reserve’s Beige Book. Talk of a “hard” or “soft” landing misses the complexity of the economy. Some parts of the US may get a hard landing, and others no landing. Thus, housing activity was weak (it is sensitive to the relentless rate increases). But consumer demand for leisure travel is so resilient that vacations may have to be considered a consumer staple, not a cyclical purchase.
- Fed Chair Powell scaled back expectations for a more aggressive March rate hike in comments yesterday. Today, we get initial jobless claims data, which is based on reality, not a survey of reality, and thus does not have the quality problems of other data.
- Chinese February inflation data was weaker. These numbers are of parochial interest—Chinese inflation has no bearing on inflation elsewhere in the world. The timing of the lunar new year will have affected consumer prices (food and travel prices helped push the headline inflation lower).
- Japanese 4Q GDP was revised lower, with a broad-based moderation of consumer activity relative to initial estimates. This about the past, but a reminder that economic data (anywhere) should not be treated as a precise metric.
