Daily update
Daily update
- Today, US consumers give thanks by spending money—cutting savings rates to buy things they don’t need. Retailers will discount prices, but those discounts may be tempered as retailers also strive to pass on cost increases, or to increase profit margins under the tariff narrative and pretend it is all about cost increases.
- US consumers increased real spending this year, funded by rising incomes. However, prices have gone up—between March and September, bananas rose 6.6%, beefsteaks 9.7%, and audio equipment 16.5%. The US price increases were paid for, almost dollar for dollar, by a reduction in household’s monthly savings rate. Consumers need to be willing to continue to reduce savings as prices rise into next year.
- Assorted Eurozone economies’ preliminary November consumer price inflation data are due. These are less exciting than the US inflation narrative as the figures are all expected to be benign to the point of dullness.
- US President Trump has declared a policy of “reverse migration” alongside immigration bans from unspecified countries. UK data showed a decline in net inward migration (with a sharp increase in the emigration of non-EU migrants). Lower inward migration will tend to lower trend growth, by reducing both worker numbers and productivity—which has fiscal implications.