Daily update
Daily update
- US Michigan consumer sentiment is due, including the inflation expectations reading. Is this useful information? It is not. The data will be distorted by frequency bias (there is more to life than food and fuel for the family fleet of SUVs, but that is pretty much all US households focus on for inflation). Political bias will also distort the data—Republicans think they are living in Weimar Germany, Democrats think inflation is under control.
- Does the headline sentiment data tell us anything about the forthcoming US elections? Almost certainly not. One of the few things that can be said about the elections with any certainty is that the opinion polls are likely to be wrong. That includes polls like Michigan consumer sentiment.
- Japan’s October Tokyo region consumer price index was softer than expected on the headline (September figures being revised lower). Energy prices were an important part of this (related to patterns in subsidies).
- Europe has the German ifo business sentiment poll. Surveys are generally erring on the more downbeat assessments of the economy, which are not then reflected in reality. Eurozone inflation expectations are subject to the same problems of frequency bias and political bias as are the expectations of US consumers in person.
