What data dependent really means
- The US has once again reminded us that you cannot trust the data – and for all the criticism of Chinese stats, US data is being revised more often and with larger changes than historically. The revisions to retail sales have changed the picture of the consumer at the start of 2016.
- Retail sales are not consumer spending, of course – the sharp rise in service sector inflation in the US (3% yoy ex energy) may leave consumers with less money for retail purchases. We get more consumer price data today.
- Does this affect the Fed? Probably not. The FOMC today is not expected to raise rates, and when the Fed says is data dependent it does not mean that FOMC members are huddled anxiously around their Bloomberg terminals awaiting each release. Proper economists look at trends.
- The UK gives us labour market data and the budget statement, both rather overwhelmed by the focus on the EU referendum. Yesterday US President Obama (clearly a fan of the audio comment) echoed our concerns about the economics of "anti-parties" in politics.